Options Traders Betting on a Boom in European Bank Earnings
- Banks can withstand negative macro events, strategist says
- Improving earnings prospects, uptick in lending to help shares
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As U.S. bank earnings wind down just as Europe’s kick off, a contrast has emerged in the options market.
While investors bought up protection before earnings day at Morgan Stanley and Goldman Sachs Group Inc., costs to hedge volatility in European banks touched a three-year low versus the broader market. And the spread in Europe will remain low -- a sign that the industry is poised to bounce back from its worst quarter in more than three years, says Citigroup Inc.’s Alexander Altmann.