Banks’ Hedges Are Cheap Before the Start of the Earnings Season
- Implied earnings-day moves are in line with past swings
- Number of JPMorgan, Wells Fargo, Citigroup options out slumped
Office workers in New York.
Photographer: Michael Nagle/BloombergJPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. are kicking off the US banks’ earnings season on Friday, and traders are feeling pretty relaxed about it.
The trio of stocks has surged more than 22% this year, yet the options market is showing little concern the rally may stumble. A measure of hedging costs for JPMorgan and Wells Fargo shares is hovering near its lowest level since 2021, while protection for Citigroup is below its one-year average, according to data compiled by Bloomberg.