Unusual Options Activity: Truist Financial Corporation (TFC)

Regional bank Truist Financial Corporation (TFC) has lost 20 percent of its value over the past year as interest rates have continued to rise. One trader is betting on a move higher in the coming months.

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  • That’s based on the February 16, 2024 $35 calls. With 70 days until expiration, 10,205 contracts traded compared to a prior open interest of 176, for a 58-fold rise in volume on the trade. The buyer of the calls paid $1.15 to make the bullish bet.

    Truist shares last went for about $33, so the stock would need to rise by $2, or 6 percent, for the option to move in-the-money.

    Truist has been trending higher since early November, but shares are still closer to their 52-week low of $25.56, rather than their high of $53.34.

    The bank has struggled a bit this year, with revenues down 8 percent and earnings down 28 percent. However, at current prices, the bank trades at a 20 percent discount to its book value.

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  • Action to take: Investors may like shares here for a rebound. Truist pays a 6.3 percent dividend yield as well. Just be on the lookout for any fears in the banking sector, as those can unwind gains quickly.

    For traders, shares are on the rise, and a 6 percent move higher in just over two months looks like a reasonable trade. The February $35 calls can likely see mid-double-digit returns or better.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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