Options Bears Blast Citigroup Stock Amid Losing Streak

C options premium is affordably priced at the moment

Assistant Editor
Jun 18, 2021 at 10:21 AM
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Lost in the shuffle of meme stocks, inflation, and everything else going on is a bank stock on the coldest of cold streaks. The shares of Citigroup Inc (NYSE:C) are down 1.9% at $67.57 at last check, pacing for what would be their 12th consecutive loss. Though the catalyst for this ongoing negative price action is unclear, the bank stock has managed to shed 14% over these last 11 sessions. C has now breached its 100-day moving average for the first time November 2020. Longer term, C is up 11.3% year-to-date.

Options bears are responding to the dip. In fact, in the first hour of trading, 13,000 puts have exchanged hands -- triple the intraday average -- versus 9,713 calls. The two most popular contracts are the September 60 and 65 puts, meaning options traders expect even more downside for Citigroup stock in the upcoming months.

These premiums are reasonably priced at the moment, too, per the stock's Schaeffer's Volatility Index (SVI) of 29%, which sits in just the 14th 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 a 92 out of 100, meaning C has exceeded option traders' volatility expectations during the past year.

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