Banking & Finance

Oppenheimer's National City Upgrade Spurns Options Activity (NCC)

Right after noon today, our screen for most active call options pointed out the movements in shares of National City Corporation (NYSE: NCC).  We already noted that famed Oppenheimer banking analyst Meredith Whitney actually upgraded her rating of National City to an “Outperform” rating from a prior “Perform” rating this morning.  But because of the woes of troubled financial stocks and the hated take-under buyouts, this stock has followed most of them lower again this morning.

CALL   Strike   Volume    OpInt
OCT-08 $3.00    23,770    6,061
OCT-08 $4.00    11,705    24,897
OCT-08 $5.00    4,895      49,084
OCT-08 $6.00    2,591      59,036
NOV-08 $3.00    6,576      1,649
NOV-08 $4.00    595        10,367
JAN-09 $2.50     5,737      9,319
JAN-09 $6.00     1,925     200,668

As of 12:17 PM EST shares of National City are down 46% at $1.97 onmore than 180 million shares.  That $5.00 target didn’t seem so highbased upon Friday’s close, but now that is a gain of 150% if it isachieved.  It seems that some traders are deciding to opt of of buying stocks and using de-leveraged options strategies where they can limit their downside if a government assisted “take-under” comes their way.

Jon C. Ogg
September 29, 2008