Unusual Options Activity: Credit Suisse Group (CS)

A move higher in global banking giant Credit Suisse Group (CS) appears likely, given the rise in the March 2021 $11 calls. On Friday, over 5,100 contracts traded hands against a prior open interest of 153, for a 33-fold rise in volume.

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  • The bet expires in 130 days. With shares at $10.65, the company needs to move about 4 percent higher for the option trade to move in-the-money.

    The trader paid about $0.75 for the option. Shares of the bank have jumped in the past week, but have largely been range-bound over the past few months.

    Over the past year, shares of the bank are down nearly 20 percent. The global recession and slashing of interest rates have left their mark on shares, but the bank can likely recover in time as the global economy does.

    Action to take: Shares have traded as high as $11.75 in the past few months. If shares are now on a run back to that high, this trade could deliver mid-to-high double-digit returns for traders. That makes this option look like a good play.

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  • Given the volatility in shares, and their propensity for trading in a range to around $9.25, traders should also keep an eye out for a chance to bet against shares should they get back into the $11 range.