Regional Banks get Taken Out 

Investors shed shares of regional banks quickly and with intensity on a day that saw a record drop in the DOW Jones Industrial average of 780 points. Buyers of Put options stepped in just as strongly to purchase out of the money and in the money Puts in Sovereign Bancorp Inc. (SOV), National City Corporation (NCC), Regions Financial Corp. (RF), and Fifth Third Bancorp (FITB). All four banks significantly dropped in value placing into question their ability to survive for very much longer with or without a Federal bail out package.

Fifth Third Bank and Regions Financial still have some value left which would be a place to look for a downside bet if there is an upside move unrelated to government action or a buyout of the firms. Sovereign Bancorp and National City have fallen too far to make a play on them at this time.