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Steve Sosnick's SPDR KBW Regional Banking ETF Trade

March 20, 2017: 04:45 PM ET

Speaking on Bloomberg Markets, Steve Sosnick of Timber Hill suggested traders should consider a bearish options strategy in SPDR KBW Regional Banking (ETF) (NYSE: KRE).

He is concerned because the financials failed to move higher with the rest of the market last week. After the Fed raised interest rates, the yield curve hasn't really changed. Sosnick sees that as a bearish sign for financials. He believes SPDR KBW Regional Banking (ETF) is going to pull back and to make money on a potential move lower, he wants to buy the April 55/52.50 put spread for $0.60.

The trade breaks even at $54.40 or 2.39 percent lower from the current stock price. It can maximally make a profit of $1.90.

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Index Last Change % Change
Dow 20,596.72 -59.86 -0.29%
Nasdaq 5,828.74 11.05 0.19%
S&P 500 2,343.98 -1.98 -0.08%
Treasuries 2.40 -0.02 -0.74%
Data as of 12:40am ET
Company Price Change % Change
Bank of America Corp... 23.12 0.05 0.22%
Micron Technology In... 28.43 1.96 7.40%
Advanced Micro Devic... 13.70 -0.09 -0.65%
Ford Motor Co 11.62 -0.05 -0.43%
Chesapeake Energy Co... 5.22 0.13 2.55%
Data as of Mar 24

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