C options are affordably priced too
Subscribers to Schaeffer's Weekend Trader options recommendation service received this C commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Bank maven
Citigroup (NYSE:C) is holding its pre-earnings candle high around its 20-day moving average. Below that, January and February highs are a potential pivot to monitor.
Options traders are heavily put skewed, per C’s 10-day put/call volume ratio of 1.48 sitting in the 92nd percentile of its annual range. This sets up for a potential unwind.
Plus, put support is stepping up at $124, while there’s potential for a large buildup at the 140 strike to act as a magnet heading into May expiration.
C options are reasonably priced per Schaeffer's Volatility Index (SVI) of 30% stands higher than just 28% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.
Our recommended call option has a leverage ratio of 8.0 and will double in value in an underlying move of 12.7% for the equity.