Although there are indications of a slowdown in volatility in the wider markets, options traders are prepared for greater-than-usual post-earnings stock price swings for certain U.S. banks, choices data indicated.
Large banks, such as Morgan Stanley and Goldman Sachs, are expected to release their financial results next week; JPMorgan, Wells Fargo, and Citigroup Inc. are scheduled to report on Friday.
The largest US consumer lenders are expected to report stronger third-quarter earnings than investment banks, which are still having difficulty closing deals, according to analysts.
According to options data, traders were anticipating a stronger-than-normal post-earnings surge, especially from Wells Fargo. According to data from options analytics service Trade Alert, traders anticipate that by Friday, shares of the fourth-largest U.S. bank would move almost 4% in either way, compared with a median change of 2.6% during the previous eight quarters.
According to Chief Financial Officer Mike Santomassimo’s statement in September, Wells Fargo, which has been reducing its personnel since the third quarter of 2020, may eliminate additional positions in an effort to increase efficiency.
According to data from Trade Alert, the options-implied earnings move for Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup also indicates a bigger-than-normal post-results movement.
According to options data, traders were anticipating a stronger-than-normal post-earnings surge, especially from Wells Fargo. According to data from options analytics service Trade Alert, traders anticipate that by Friday, shares of the fourth-largest U.S. bank would move almost 4% in either way, compared with a median change of 2.6% during the previous eight quarters.
According to Chief Financial Officer Mike Santomassimo’s statement in September, Wells Fargo, which has been reducing its personnel since the third quarter of 2020, may eliminate additional positions in an effort to increase efficiency.
According to data from Trade Alert, the options-implied earnings move for Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup also indicates a bigger-than-normal post-results movement.
higher interest rates and more stringent laws following the local bank crisis.