$500 Million Sales Error Forces Barclays to Delay Buyback

The stock is back below a key trendline in response

Deputy Editor
Mar 28, 2022 at 9:50 AM
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U.K.-based bank giant Barclays PLC (NYSE:BCS) revealed today that it mishandled roughly 450 million pounds, or $592 million, in structured product sales, leading the company to delay its £1 billion buyback program to the second quarter. The shares of Barclays are sinking in response, last seen down 3.4% to trade at $8.74. 

It's been a rough couple of months for BCS, which has shed 12.5% since the start of the year. The stock is just now coming off an annual low of $7.88, touched on March 7, though its rally lost steam near the $9.40 level. While the 20-day moving average briefly stepped in as support, the stock looks ready to open back below this trendline today. 

Analysts have remained bullish, and a shift in this sentiment could put additional weight on the stock. Two of the three in coverage call BCS a "strong buy." Plus, the 12-month consensus price target of $11.93 is a 31.8% premium to current levels. 

Options traders, on the other hand, have already taken a bearish stance. at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BCS sports a 50-day put/call volume ratio that stands higher than 90% of readings from the past year. In other words, long puts have rarely been more popular during this time period. 

Now may be the time to speculate on the stock's next move with options. BCS' Schaeffer's Volatility Index (SVI) of 38% sits in the low 28th percentile of its 12-month range. In other words, options traders are pricing in relatively low volatility expectations at the moment. 


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