Unusual Options Activity: Valley National Bancorp (VLY)

Regional bank Valley National Bancorp (VLY) is near 52-week highs and nearly double off its lows from the spring. One trader sees the bank moving even higher in the coming months.

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  • That’s based on the March 2024 $12 calls. With 88 days until expiration, 7,589 contracts traded compared to a prior open interest of 149, for a 51-fold rise in volume on the trade. The buyer of the calls paid $0.50 to make the bullish bet.

    Shares last traded just over $11, so they would need to rise $1, or about 9 percent, for the option to move in-the-money.

    The stock’s 52-week high of $12.61 was hit in January,  before the bank shares took a 50 percent drop.

    Even with shares trending higher and well off their lows, the bank trades at about a 20 percent discount to its book value.

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  • Plus, shares are inexpensive at 9 times forward earnings. Earnings are only down 20 percent over the past year as interest rates have jumped higher.

    Action to take: Investors may like shares here, as they’ll likely keep trending higher towards their book value. Plus, Valley National currently pays a 4.2 percent dividend.

    For traders, the March $12 calls could move in-the-money in the months ahead. It’s likely the option will see high-double-digit returns or better as shares continue their uptrend.


    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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