Regions Financial Corp. (RF)
day for the Banks as a number of banks post big losses in stock value on the
day and a number hit new 52 week lows including Wachovia (WB), Key Bank (KEY),
Huntington Bancshares (HBAN), and Suntrust Banks (STI). Just to name a few. The
overall market remains in a correction with the financials responsible for much
of the bad sentiment.
Financial (RF) showed up on my radar as there was a large amount of Put
activity in the month of July at the $12.50 strike price. The stock itself
closed the day at $12.73 down 7.42%. The volume on the Puts was 14,596
contracts with only 1,316 open interests. Investors definitely feel Regions
will decline more over the next month with this large amount of activity at a
strike price below the current stock price.
Fortune Calls for
a story this morning naming a number of banks likely to cut their dividends.
Regions Financial was named as one of the banks along with Bank of America
(BAC), Wachovia (WB) and Fifth Third (FITB). The earnings expectations for the
bank haven’t taken the hit that other banks such as National City (NCC) has
taken, but with the possibility of the bank cutting it’s 11.4% dividend being
very likely, buying the Puts or shorting the stock is a good short term trade.