Fifth Third Bancorp has been pulling back from multi-year highs in recent days, but traders are betting that further downside will be limited.
More than 7,000 May 13 puts traded in a strong selling pattern for $0.08 on Friday, optionMONSTER's tracking systems show. The volume was more than 10 times higher than the strike's open interest of 673 contracts before the session began, clearly indicating that these are new positions.
The put sellers are looking for FITB to stay above $13 through expiration in mid-May. If the stock falls below that strike price, the traders will face the obligation to buy shares at that level. (See our Education section)
FITB slipped 0.53 percent on Friday to close at $16.05. The financial firm bounced sharply at the $14 level in mid-November and climbed to $16.77 on Feb. 7, its highest price since the financial crisis hit the stock market in September 2008. But shares dropped last Wednesday after CEO Kevin Kabat, speaking at the Credit Suisse Financial Services Forum, said margins are tightening in the mortgage business.
Friday's put selling pushed total option volume in Fifth Third to 12,761 contracts, more than 5 times its daily average in the last month.
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