Bank Bulls Bust As Fed "Error" Boosts Bearish Bets

Tyler Durden's picture




 

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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Wed, 01/06/2016 - 15:00 | 7006121 _ConanTheLibert...
_ConanTheLibertarian_'s picture
Bank Bulls Bust As Fed "Error" Boosts Bearish Bets Bitchez!
Wed, 01/06/2016 - 15:04 | 7006140 Takeaction2
Takeaction2's picture

And look at SIlver just go to the moon...

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.

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up 2 cents.

Wed, 01/06/2016 - 15:10 | 7006184 Soul Glow
Soul Glow's picture

The last shall finish first.

Wed, 01/06/2016 - 14:59 | 7006122 Soul Glow
Soul Glow's picture

Kill them.  Kill them all.

- Spartacus

Wed, 01/06/2016 - 14:59 | 7006125 Janet Shalom Be...
Janet Shalom Bernanke's picture

Fed running out of runway fast.

https://www.youtube.com/watch?v=PytkwzGk1RI

 

Wed, 01/06/2016 - 15:11 | 7006194 KnuckleDragger-X
Wed, 01/06/2016 - 15:00 | 7006127 Pheonyte
Pheonyte's picture

Come on ZH, enough with the overdone alliteration in the headlines. This isn't the high school newspaper.

Wed, 01/06/2016 - 15:06 | 7006159 Soul Glow
Soul Glow's picture

STFU

Wed, 01/06/2016 - 15:09 | 7006178 Pheonyte
Pheonyte's picture

A high school level reply, figures.

Wed, 01/06/2016 - 15:15 | 7006219 Soul Glow
Soul Glow's picture

If you don't like what ZH posts, don't read the posts, let alone join the comment section.

Wed, 01/06/2016 - 15:17 | 7006227 Pheonyte
Pheonyte's picture

My comment was about the headline, dickwad, not about the content of the article. And who the fuck made you comment section moderator?

Wed, 01/06/2016 - 15:29 | 7006306 Soul Glow
Soul Glow's picture

I've always been comment section moderator.

Wed, 01/06/2016 - 15:33 | 7006340 Pheonyte
Pheonyte's picture

Explains why most of the people with brains who used to comment here are long gone.

Wed, 01/06/2016 - 16:05 | 7006515 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Haha what are YOU then still doing here after SEVEN years.

Wed, 01/06/2016 - 16:08 | 7006549 Pheonyte
Pheonyte's picture

If it's not too strenuous for a special needs individual such as yourself, start working on the meaning of the word 'most'.

Wed, 01/06/2016 - 15:08 | 7006172 The_Virginian
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Got you to click, n00b. Way to prove them wrong. 

Wed, 01/06/2016 - 15:11 | 7006189 Pheonyte
Pheonyte's picture

7 years here and I'm still a "n00b"?

Wed, 01/06/2016 - 15:14 | 7006210 KnuckleDragger-X
KnuckleDragger-X's picture

We also quote movies, philosophers, poets and radicals. This is THE fight club after all......

Wed, 01/06/2016 - 15:02 | 7006134 mtndds
mtndds's picture

Wait for the 3:30 pm market ramp up because everything is TRANSITORY.

Wed, 01/06/2016 - 15:16 | 7006222 KnuckleDragger-X
KnuckleDragger-X's picture

So are earthquakes and nuclear weapons.......

Wed, 01/06/2016 - 15:37 | 7006370 Ruffmuff
Ruffmuff's picture

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.

Wed, 01/06/2016 - 16:06 | 7006532 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Fuckyoushima LOL. Best one.

Wed, 01/06/2016 - 15:04 | 7006146 Squid Viscous
Squid Viscous's picture

"Bear Stearns is fine!"

Wed, 01/06/2016 - 16:06 | 7006537 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Yes, everything is CONTAINED 

/s

Wed, 01/06/2016 - 15:05 | 7006149 hound dog vigilante
hound dog vigilante's picture

+10 for epic alliteration in the headline here... love it.

Wed, 01/06/2016 - 15:06 | 7006158 The_Virginian
The_Virginian's picture

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. 

Wed, 01/06/2016 - 15:23 | 7006279 Glass Seagull
Glass Seagull's picture

 

 

Buy the XLF!!

Wed, 01/06/2016 - 15:37 | 7006364 RexZeedog
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Beasty Boys Bash Business Brutally and Bogus Bids Bounce is Banished !

Do NOT follow this link or you will be banned from the site!