SIVB; and baby with bathwater. Which reg banks worth buying on dip?

I tried this during the last banking crisis and it cost me ~$10K from friday to monday morning. :-(
Bought $11K of Wachovia Bank friday then monday pre-market BAC announced they were taking over the bank & David Faber said the Wachovia equity was essentially worth zero so I quickly sold in the pre-market for ~$1K only to find out later David was wrong.
 
I bought SCHW Friday because it seems like a big block trade really spooked people about it in the morning and it got wrapped up in all this.

I think there is a good trade here because everyone remembers the last banking crisis. Someone managing other people's money has to be defensive here from the reputation risk if there is a contagion.

In SIVB annual report it mentioned under Credit Risks
"Wineries and vineyards. In addition, we lend to premium wineries and vineyards through SVB's Wine Division "

A bank with a Wine Division is so West coast. I am going to do some more analysis this weekend but any geographically Eastern bank like PNC was thrown out with the bath water.

Keep in mind I am looking to scalp this, not really looking to overweight the banking sector in my portfolio. I would just expect the multiples to normalize but if the bottom does fall out PNC is paying a 4.37% dividend at these prices . Citizens is in about the same boat.

I will probably trade a bank long if we drop Monday morning but I am not buying a bounce.

From what I have seen the real risk is non-banks that were tied to SIVB and long term this is probably pretty devastating to the startup ecosystem.
 
Happy Hopping said:
Oh, I didn't know that. And you're right: CNBC shows $39, so I thought they are trading
More...

I was watching the closing Bell last night, and noticed the moves during their halted state in ETH. When I first tuned into the show, they had the chart of SIVB at 0. Then it jumped to like 80 and was instantly halted, because of the percentage move. Then minutes later, it dropped to 30ish, and halted again. So those were velocity halts happening all through the ETH session.

But this brings up another question in my mind, and it is more options-related, so sorry for that...

What would have occurred if someone bought puts of SVIB on Wednesday, when the stock was at 300. So you buy 10 puts with a strike of 290, expiring in a month? Would you even be able to exercise that strike on Friday? Can you exercise a put on a stock that is at zero?

Does anyone have an options table showing how the prices changed from Wednesday to Friday?
 
Last edited:
while their options expire on Fri. Mar. 17, that's my question too. I supposed it's like what happened on Sep. 11, 2001, when the exchange is closed for 7 days, they have to honor those options back dated.

whenever a stock is halted, people w/ option call would want to get out, so they have to fix this before the options expire the coming Fri.

I am seriously thinking of buying options put on this guy, but now, I am thinking I should move back to MSTR, as it is the most shorted stock on the market at a EPS of $ NEGATIVE 55.00
 
You must log in or register to reply here.
Back
Top