Markets

Bulls shift their attention to Swiss banks

The bulls turned their attention to Swiss banks yesterday, following heavy call buying in major U.S. lenders last week.

optionMONSTER's Heat Seeker tracking program detected a surge of call buying in Credit Suisse and UBS. Both trades occurred within minutes of each other and focused on the January expiration.

It started in CS with the purchase of 5,800 January 24 calls for $1.45 to $1.50. That pushed total volume in the name to 5 times more than average levels and came against virtually no open interest in the strike.

Activity was more dramatic in UBS at almost 9 times normal levels. This time, the Heat Seeker showed buying in the January 12.50 calls for $0.65, with more than 8,700 trading against open interest of 3,557 contracts.

CS ended the session down 1.14 percent at $22.46, while UBS rose 0.70 percent to $11.48. Both are attempting to hold their ground after big moves on Monday's rally. Financial stocks remain at the center of concern as leaders in Europe attempt to remedy the region's unwieldy public-sector debt problem.

News continued to flow on the industry after the bell. On one hand, finance ministers agreed to increase their bailout fund by a still-undetermined amount. But on the bearish side, Standard & Poor's downgraded several large U.S. banks, including JP Morgan and Bank of America, after changing its ratings methodology for the sector.

Yesterday's call buying in the Swiss banks seems to reflect optimism that the crisis will be fixed. It also followed some big out-of-the money call buying in big banks last Wednesday , which doubled some investors' money in a single session. (See our Education section)

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

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


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

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