HSBC has been explosive, and the bulls are playing with the
On April 24, an investor bought 3,800 of the September 55 calls for
$1.37 and $1.38. By yesterday they had more than doubled to $3, so
the investor sold them and used the money to buy about 5,000
September 60 calls for $0.89.
The trader received $695,000 from the transaction and is up roughly
$172,000 from the initial entry. He or she also stands to profit
from continued upside in the name because even more
calls are owned
at the September 60 strike. (See our
section for more on how to manage trades with options.)
HBC rose 2.15 percent to $57 yesterday and is up more than 7
percent since the initial call buying. The stock has been climbing
along with other
as confidence in the financial sector
beyond the United States. Banks in the most
, such as Greece and Spain, have been doing even better.
The trend resembles a pattern that emerged in the United States
last year as
such as Radian, with heavy exposure to home mortgages, exploded
higher. That was a harbinger of improvement in the broader sector.
Yesterday also saw unusual activity in Brazilian lender Itau
Unibanco, which has spent the last two weeks consolidating above
its 200-day moving average. In ITUB, activity focused on the
September 19 calls, with almost 4,000 purchased for $0.35 and
$0.40. The stock rose 3.73 percent to $17.25.