Deutsche Bank has been screaming higher, and the bulls aren't
done with the stock yet.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 3,000 May 48 calls for $0.95 and the sale of an equal
number of May 48 puts for $1.25. Volume is more than 7 times the
previous open interest at each strike, clearly showing that this is
The resulting position is highly leveraged to the German financial
giant, with both the
correlated to the stock price. The investor collected a credit of
$0.30 from opening the trade and now stands to earn infinite
profits if it climbs above $48 over the next two weeks.
Below that level, he or she must buy stock for $48. The trade is
unusual because the trader sold puts that are slightly in the money
to obtain significant leverage. (See our
DB is up 2.2 percent to $47.90. The stock is up 22 percent in the
last month as its low price-to-book ratio draws interest with an
improving financial situation in Europe. (See our
on European banks from last month.)
Total option volume is twice the daily average in DB so far today.
The Heat Seeker also detected buying in the May 42 calls for $0.80
two weeks ago
, and those contracts have now appreciated by more than 600
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.
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