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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