Shares of German megabank Deutsche Bank (DB) have been trading in a range over the past year. One trader is betting that the stock’s recent attempts to move higher will continue in the next few weeks.
That’s based on the March $14 calls. With 45 days until expiration, 6,870 contracts traded against an open interest of 219, for a 31-fold rise in volume. The buyer of the calls paid $0.43 to make the trade.
Shares last went for about $13.20, so the stock would only need to rise another 80 cents, or about 6 percent, for the option to move in-the-money. The stock has largely traded in the $12-13 range, with a few jumps higher into the $14-15 range over the past year.
Action to take: The bank has been a poor performer over the past few years, but has been faring better operationally lately, making for a solid value among the global big banks. Shares currently trade for less than 9 times forward earnings, and the stock trades at a price to book ratio of just 0.36. Investors can likely profit buying shares at the lower end of their range and flipping them for a profit on a move higher.
For traders, the March calls could deliver mid-to-high double-digit returns in the next few weeks before they expire, as the stock appears to be starting one of its uptrends once again.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.