Deutsche Bank AG (USA) (DB) Option Bears Brace for Lower Lows

Deutsche Bank AG (USA) (NYSE:DB) hit a record low earlier, as "Brexit" anxiety ramps up

Jul 6, 2016 at 2:27 PM
facebook X logo linkedin


It's been a sharp fall from grace for Deutsche Bank AG (USA) (NYSE:DB), with the shares down 3.7% at $12.91 -- and fresh off a record low of $12.50. As a point of comparison, DB stock was trading in the $30 range one year ago. Aiding the European bank stock in its more recent decline has been increasing "Brexit" anxiety, while earnings-related issues sent the shares tumbling in March. Meanwhile, the company just announced the departure of one top exec, while reports are swirling over the possible sale of at least $1 billion in shipping assets. Against this unstable backdrop, options traders have been growing increasingly uneasy.

Today, in fact, DB puts are crossing the tape at three times the expected intraday rate -- and outpacing calls by a 4-to-1 margin. Plus, with 32,929 puts traded, put volume is in the 99th annual percentile. It looks as if a number of put traders are betting on even lower lows for the bank stock, with buy-to-open activity detected at DB's August 11 and 12 strikes.

More broadly speaking, option buyers have shown a preference for puts over calls in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 34,774 DB puts versus 16,675 calls, resulting in a top-heavy put/call volume ratio of 2.09.

Echoing this heavy put-skew is DB's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 2.37, meaning near-the-money puts more than double calls among options expiring in three months or less. Plus, the stock's put open interest hit a 52-week peak of 583,448 contracts yesterday.

This skepticism isn't confined to the options pits, either. Short interest surged 18.7% in the most recent reporting period to 5.2 million shares -- the loftiest amount of shorted DB shares since March 2009. Plus, analysts have been quick to readjust their ratings amid the stock's decline. Currently, each of the three brokerage firm covering Deutsche Bank AG (USA) (NYSE:DB) call it a "hold" or "strong sell."

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI