Goldman Sachs Group Inc, Citigroup Inc. Options Active Amid Financial Rally

Short-term traders are placing bets on rallying Goldman Sachs Group Inc (GS), Citigroup Inc (C)

Jun 5, 2015 at 11:25 AM
facebook twitter linkedin


Financial stocks are gaining ground this morning, and Goldman Sachs Group Inc (NYSE:GS) and Citigroup Inc (NYSE:C) are no exception. The former has added 1.4% to trade at $211.85 -- and earlier hit a post-recession peak of $211.94 -- and the latter was last seen 2.1% higher at $56.47, within a chip-shot of new-high territory. Against this backdrop, GS and C options are flying off the shelves, as traders place short-term bets. 

Eleventh-hour option bulls are circling GS, wagering on even higher highs for the stock by the close. Call volume is running at four times the average intraday rate, with buy-to-open action spotted at the weekly 6/5 210 and 212.50 strikes -- the two most popular options thus far.

Goldman Sachs Group Inc (NYSE:GS) calls have outnumbered puts by a margin of 3-to-1 today, marking a major shift in sentiment. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.81 stands higher than 99% of all other readings from the past year. In other words, GS speculators have been buying to open puts over calls at a near-annual-high clip during the past two weeks. A capitulation among these skeptics could result in tailwinds.

C options, meanwhile, are running at twice the average intraday pace. The most popular option is the out-of-the-money June 52 put, where it looks like traders are purchasing the contracts to open. By doing so, the speculators are either gambling on C to backpedal south of $52 by the close on Friday, June 19, when front-month options expire, or they're looking to protect their C shares with an options hedge. 

Whatever the motive, Citigroup Inc's (NYSE:C) near-term options are a bargain right now, relatively speaking. The stock's Schaeffer's Volatility Index (SVI) of 19% stands higher than just 24% of all other readings from the past year, suggesting C's short-term contracts are attractively priced, from a historical standpoint.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners