Deutsche Bank AG’s shares have dipped by 3% to $12.12 as of recent updates, following BofA Global Research’s decision to downgrade the stock from “neutral” to “underperform.” The financial research firm cites Deutsche Bank’s slow growth compared to other European banks, which remains heavily dependent on volume, as the main reason for the downgrade.
The stock has been steadily declining since reaching its one-year high of $13.57 on February 1st, causing the stock to fall below its 20-day moving average. Despite this recent dip, Deutsche Bank’s shares have still seen an increase of 5.4% year-to-date.
Options traders have been picking up puts at a faster rate compared to calls, with a ratio of 8.81 puts per call in the past 10 weeks, according to data from the International Securities Exchange, Cboe Options Exchange, and NASDAQ OMX PHLX. This ratio is higher than 82% of readings from the past year, indicating a heightened preference for puts over calls.
The Schaeffer’s Volatility Index (SVI) of 30% for Deutsche Bank’s stock suggests that options are currently priced attractively, with a reading that sits in the lowest percentile of its annual range. Additionally, the security’s Schaeffer’s Volatility Scorecard (SVS) of 90 out of 100 implies that Deutsche Bank has exceeded option traders’ volatility expectations over the past year. With these factors in mind, now may be a good time for investors to consider making moves in the bank’s options.
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