More Bets Against Regional Banks
Ones with large unrealized losses and other strikes against them.
Los Angeles’s Far East Bank gets a large, unscheduled withdrawal (Heat, 1995).
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 0.00%↑ ) — Exited for an 80% gain today.
First Foundation, Inc. ( FFWM 0.00%↑ ) — Exited for a 200% gain on Tuesday.
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 0.00%↑ ), 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.
Ally Financial Inc. ( ALLY 0.00%↑ ). I bought the $18 strike, September puts at $1.10.
Keycorp ( KEY 0.00%↑ ). I bought the $7 strike, July puts at $0.95.
Looks good David, regarding your putting the limit order to close, where would be a good order to place to lock in profits for both when they go south?
Is see I can put a limit order on single trades, though there is not limit on spreads, is there?
Greatly appreciate your help.
I was hoping someone would answer, on the ALLY, are we putting the limit at 50% higher, 1.65? What about a limit order to stop a loss?
Thanks in advance to anyone who can assist.