Analysts, Options Traders Chime in on Citigroup Stock Amid CEO Shift

Options volume is running at double what's typically seen at this point

Deputy Editor
Mar 1, 2021 at 10:16 AM
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The shares of Citigroup Inc (NYSE:C) are up 4.3% at $68.68 at last check, amid news that Citigroup's new CEO Jane Fraser will be taking over for Michael Corbat today, making her the first woman to run a major U.S. bank. In response, Wells Fargo and Morgan Stanley raised their price targets to $82 and $81, respectively. Meanwhile, the bank sector as a whole is rising on upbeat Covid-19 vaccine and relief bill sentiment.

After bouncing off the 60-day moving average and $57 level at the end of January, C has been climbing on the charts -- up 17.9% in the last month. However, the stock is now seeing pressure at the $69 region, home to the its annual Jan. 14 high of $69.42. 

In the last 10 weeks, 3.63 calls have been bought for ever put on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 87% of readings from the past year, indicating long calls are being picked up at a relatively faster-than-usual pace. 

Today's options pits show a similar picture, though overall volume is running at double what's typically seen at this point. So far, 14,000 calls and 6,836 puts have crossed the tape, with the most popular the weekly 3/05 70-strike call, where new positions are being opened.

These premiums are reasonably priced at the moment, too, per the stock's Schaeffer's Volatility Index (SVI) of 37%, which sits in just the 6th percentile of readings from the past year. This implies that options players are currently pricing in relatively low volatility expectations. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at an 86 out of 100, meaning C has exceeded option traders' volatility expectations during the past year.


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