Deutsche Bank Stock Drops on Downgrade

Options bears have been targeting the equity

Deputy Editor
Feb 10, 2023 at 10:13 AM
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Deutsche Bank AG (NYSE:DB) is down 3% to trade at $12.12 at last glance, after BofA Global Research downgraded the stock to "underperform" from "neutral." The firm sees DB falling behind other European banks, as its growth remains "volume reliant." 

Today's drop has DB extending the fall from its recent Feb. 1, nearly one-year high of $13.57, after which the stock dropped below its 20-day moving average. Year-to-date, the equity is still up 5.4%.

In the past 10 weeks, 8.81 puts have been picked up for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 82% of readings from the past year, showing puts outpacing calls and being picked up at a faster-than-usual rate. 

Now could be a good time to weigh in on the security's next move with options. Deutsche Bank stock is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 30%, which sits in the lowest percentile of its annual range. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at a 90 out of 100, meaning DB has exceeded option traders' volatility expectations during the past year.


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