Put Traders Pounce on Bank Stock

Options bears are blasting the equity

Deputy Editor
Mar 24, 2023 at 10:19 AM
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Shares of German lender Deutsche Bank AG (NYSE:DB) are 6.6% lower this morning, after a spike in credit default swaps increased worries about the European baking sector's stability. Credit default swaps, or the cost of insuring the bank's debt against the risk of default, hit more than four-year highs.

Today's drop has DB trading just above $9, or their lowest level since October. A confluence of long- and short-term moving averages are weighing on Deutsche Bank stock, as it heads for its third-straight weekly loss. Year-to-date, the equity is down 16.2%.

Put traders are jumping in on the action, with 22,000 bearish bets crossing the tape already today -- 13 times the average intraday amount. The most popular contract is the April 9 put, while new positions are being opened at the weekly 3/24 9-strike put.

This preference for bearish bets is nothing new. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Deutsche Bank stock sports a 10-day put/call volume ratio of 12.72, which ranks higher than 87% of readings from the past year, showing puts outpacing calls and being picked up at a faster-than-usual rate. 

 

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