Bullish trade on Regions Financial

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Regions Financial has had a healthy pullback, and now one bull is looking for more upside.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 6,000 June 8 calls on the Alabama-based lender for $0.24. At the same time, an equal number of June 9 calls was sold for $0.03, resulting a net debit of $0.19.

RF Chart RF rose 4.73 percent to $7.75 after starting the session with a 15 percent drop over the preceding month. The stock had been a favorite among option traders looking to play the rebound in regional banks earlier in the year, attracting several large bullish transactions. The company reported a smaller-than-expected loss on April 20 as new customers opened accounts and bad-loan growth slowed.

Bulls may like RF because it appears to have found support around the same $7 level that was resistance throughout 2009. Chart watchers may consider that evidence the shares are headed higher.

The call spread is designed to leverage a rebound, and will earn about 400 percent profit if RF closes at or above $9 on expiration.

Overall option volume in the name is almost twice the average level, with calls outnumbering puts by 50 to 1.

(Chart courtesy of tradeMONSTER)




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: RF

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As of 12/24/2014, 02:12 PM


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