Betting Against Another Regional Bank

Taking advantage of today’s bounce.

Still from the bank robbery scene in Heat (1995).

Taking Advantage of Today’s Bounce

In yesterday’s post, I mentioned exiting two bets against regional banks, and opening another two.

Moving Quickly Here

With regional banks tumbling this week, I am now out of two of the three put positions I had opened in the post below:

• Bank of Hawaii ( BOH 2.83%↑ ) — Exited for an 80% gain today.

• First Foundation, Inc. ( FFWM -1.63%↓ ) — Exited for a 200% gain on Tuesday.

Trade Alert

PORTFOLIO ARMOR

MAR 14

"You're thinking of this place all wrong, as if I had the money back in a safe. Your money's in Web3 innovations, it's in startups empowering women" — Delicious Tacos, riffing on the bank run scene in “It’s a Wonderful Life”. Searching For Banks To Bet Against

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I did some research on additional regional banks to bet against last night, ones with large unrealized losses and other metrics indicating weak financial health. One that looked promising was Western Alliance Bancorp ( WAL 23.17%↑ ), but it’s already crashing today, so I placed bets against two of the other names that came up last night that are only down single digits so far today. Details below.

Both of these banks below had negative accumulated other comprehensive income (large unrealized losses) as of the end of last year, according to this article. Since things are moving quickly, I didn’t spend any time checking to see how their unrealized losses had changed in Q1. They both also had Piotroski F-Scores of 1 (remember, scores of 0-2 indicate distress) and had profitability and health ratings of 1 or 0.

There was another bank that came up during my screens Wednesday night, but I didn’t get filled on my trade against it on Thursday. I just got filled on it this afternoon. Details below.