Markets

Unusual bullish play on Fifth Third

Fifth Third Bancorp fell yesterday, and one investor stepped in with an unusual upside trade.

optionMONSTER's monitoring systems detected the sale of more than 7,000 December 12 puts for $0.45, matched against the purchase of an equal number of January 15 calls for $0.16. The transaction occurred when the stock was trading near its lows for the session.

FITB

FITB fell 2.29 percent to $12.39 yesterday. The Cincinnati-based lender has been pushing lower since Nov. 5, when it rallied to its highest price in more than four months before reversing sharply to the downside.

Its last earnings report on Oct. 21 beat forecasts, and it continued to unload toxic mortgage assets.

Yesterday's option trade generated a credit of $0.29 and will profit from a rally in the share price. It was unusual because the puts sold expire before the calls purchased.

While it appears bullish the transaction may have been the work of a short seller looking to hedge against a rally. That would lock in a $12 exit price while protecting against the stock rallying over $15.

Overall options volume in FITB was 7 times greater than average in the session.

(Chart courtesy of tradeMONSTER)

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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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