The SPDR S&P 500 Regional Banking Fund today yielded exponential returns on bullish options opened only a few days ago.
On Monday, Investitute’s tracking systems found that 14,800 December $57 calls were purchased mostly in one print for $0.70 with shares at $56.21. This was clearly fresh buying, volume was double the strike’s open interest of 7,529 contracts. Investitute co-founder Pete Najarian pointed out huge call buying in financial names Wednesday on CNBC’s “Halftime Report.”
Those calls traded up to $3.76 today, more than 5 times their purchase price. The stock rose 7.5 percent at the same time, showing how quickly options can far outpace gains in their underlying shares.
KRE hit a 52-week high of $60.59 today before pulling back in the afternoon to close at $59.33, off 0.85 percent. The fund rallied sharply as the financial sector benefited from a heavy rotation out of technology stocks this week.