Fifth Third Bancorp has been on a huge run, but one large trader
is apparently expecting a pause.
optionMONSTER's scanning programs detected the sale of 10,250
contracts each in the August 19 calls for $0.37 and the August 19
puts for $0.57. Volume was more than 4 times the previous open
interest at each strike, indicating new activity.
The investor collected a credit of $0.94, which will be his or her
profit if the regional bank closes at $19 on expiration. Gains will
erode on either side of that price, turning to losses under $18.06
and over $19.94.
Known as a
, the trade is designed to make money from the
passage of time
rather than a directional move. (See our
section for other
FITB is unchanged at $18.80 in morning trading but is up 24 percent
so far this year. It's been rallying along with other banks as the
housing market improves and the yield curve steepens.
The rally has brought the shares back to the same level where they
found support in early 2008 before crashing along with the rest of
the market. That could be leading some chart watchers to anticipate
a pause and help explain the short straddle.
Total option volume is 15 times greater than average so far in the
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