Latest from the Quantamize Blog

Time to Short Bank Stocks. We show you how!

Apr 12, 2019


I'm Stephen from Quantamize, and I've got an exciting banks trade you're going to hear about. You're watching the Quantamize Options Trade Update.

Today's trade idea is the S&P Regional Banking ETF, ticker KRE, and our idea is to put a put spread collar on that. Now, why is that? Well, implied volatility is in the 90th percentile, and remember what we talked about. When implied volatility is really expensive, it's really great to sell volatility.

Now, why is it a sell? Well, our Quantamize models are saying it's a sell, and let me give you a little fundamental background for it. It's pretty simple. Rates aren't going up anymore, and they're probably going to go down. What does that do for banks? That impacts their profitability because NIMs are now going to narrow.

The NIM margin is what drives profitability for banks. It's something you should really watch if you're trading banks, and in this case, we think it's going to narrow. This is a sell idea. KRE, put spread collar. It's a high-conviction options trade that you need to check out.

Thanks for watching this video. We'd love to hear from you and hear what you think about this trade idea. Subscribe to our YouTube channel, leave a comment below, shoot us a Tweet, or send us an email. I'm Stephen from Quantamize, and you were just watching an Options Trade Update.