Bank Bulls Bust As Fed "Error" Boosts Bearish Bets
Just as we saw in the August collapse, US financial stocks appear to be facing the harsh reality that other markets already recognize. While US financial credit markets have been anything but exuberant for weeks, equity options markets have now turned their bullish backs on the banks as Bloomberg reports the ratio of bearish to bullish options on the S&P Financials ETF has climbed to the highest level in a year this week, reflects rising demand for protection against losses as NIM hopes collapse and Fed "error" probabilities increase.
Bank stocks are once again catching down to financial credit markets...
And now, as Bloomberg reports, while the start of Federal Reserve tightening was supposed to boost stocks in financial firms that have seen interest income shrivel, if hedging activity is any indication, investors are getting antsy about that trade.
The ratio of bearish to bullish options on an exchange-traded fund tracking financial companies in the Standard & Poor’s 500 Index has climbed to the highest level in a year this week, according to data compiled by Bloomberg. That reflects rising demand for protection against losses in an ETF that absorbed $1.7 billion over the last three months of 2015, the most among nine industries.
Traders own 178 bearish contracts on the SPDR Financial Select Sector ETF for every 100 bullish ones, according to data compiled by Bloomberg as of Jan. 4. The measure rose to 181 on Dec. 30, the highest put-call ratio since Nov. 24, 2014. On average in 2015, the ratio was 118-to-100.
"Everyone’s saying the financials are going to get better because interest rates are rising but it’s not going to happen overnight,” Michael Block, chief strategist at Rhino Trading Partners LLC in New York, said by phone. “People should be worried about earnings, about how banks are going to make money. They need higher interest rates and they need more trading opportunities.”
But, but, but...everyone said Financials were a no-brainer?!
Charts: Bloomberg
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And look at SIlver just go to the moon...
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up 2 cents.
The last shall finish first.
Kill them. Kill them all.
- Spartacus
Fed running out of runway fast.
https://www.youtube.com/watch?v=PytkwzGk1RI
Pretty much.... https://www.youtube.com/watch?v=oHSkMwUa2i4
Come on ZH, enough with the overdone alliteration in the headlines. This isn't the high school newspaper.
STFU
A high school level reply, figures.
If you don't like what ZH posts, don't read the posts, let alone join the comment section.
My comment was about the headline, dickwad, not about the content of the article. And who the fuck made you comment section moderator?
I've always been comment section moderator.
Explains why most of the people with brains who used to comment here are long gone.
Haha what are YOU then still doing here after SEVEN years.
If it's not too strenuous for a special needs individual such as yourself, start working on the meaning of the word 'most'.
Got you to click, n00b. Way to prove them wrong.
7 years here and I'm still a "n00b"?
We also quote movies, philosophers, poets and radicals. This is THE fight club after all......
Wait for the 3:30 pm market ramp up because everything is TRANSITORY.
So are earthquakes and nuclear weapons.......
So the best of both worlds have nuclear weapons that cause earthquakes. Just ask those in fukyou shima. NIce techtonic test. Almost as perfect as those 911 detonations. Or for those living in denial that a paper airplane desolved building 7.
It is purely amazing how the criminal mind could get so many assholes to grow corruption in every nook and cranny.
Fuckyoushima LOL. Best one.
"Bear Stearns is fine!"
Yes, everything is CONTAINED
/s
+10 for epic alliteration in the headline here... love it.
If interest rates ever do rise again in the West, it will be when the Fed loses control. And when that day comes, you won't want to own a bank. You'll want hard assets.
Buy the XLF!!
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