Options Brief: Regions Financial Corp. (RF)

RF – Regions Financial Corp. – Investors initiated bullish trading tactics on Regions Financial this morning with shares of the banking and financial services firm higher by 4.60% to $7.74 as of 10:35 am (ET). Options players anticipating continued appreciation in the price of the underlying stock through June expiration purchased plain vanilla debit call spreads. Investors picked up roughly 6,000 calls at the June $8.0 strike for an average premium of $0.23 apiece, and sold about the same number of calls at the higher June $9.0 strike for an average premium of $0.03 each. The average net cost of the transaction amounts to $0.20 per contract. Call-spreaders make money if Regions’ shares rally another 5.95% over the current price of the stock to surpass the average breakeven point at $8.20. Maximum potential profits of $0.80 per contract are available to RF-bulls if shares of the banking-related services company jump 16.3% to exceed $9.00 by expiration day next month. Regions’ shares last traded over $9.00 back on April 26, 2010, when the stock touched an intraday high of $9.05.

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Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

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