It’s the inevitable gut reaction that we all have. If you see massive debit-based puts in the options flow screener like we just did for financial giant Citigroup (C), acute feelings of pessimism rise to the forefront. However, the derivatives market can be tricky because you’re never really sure about underlying intentions. In this case, the unusual options activity very well might be bullish for C stock in a roundabout way.
On Monday, Citigroup’s options flow readout — which focuses on big block transactions likely placed by institutional investors — showed that net trade sentiment slipped to nearly $3.6 million below parity. To be fair, sentiment constantly fluctuates in the derivatives arena. Plus, it should be noted that last week, sentiment was overwhelmingly positive.
