Following up on Betting on Citigroup to Trade Above $5.00 By February 19th (C).
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From Barron's The Striking Price column:
The bank could rise above $5 or be relegated to a penny stock.
One of the biggest bets on Wall Street is if 2011 will mark Citigroup's rebirth or another year of purgatory.
In the options market, where such questions are usually answered by analyzing trading patterns, all that is clear is that Jan. 18 is a major inflection point that could once and for all tilt the war in favor of the bulls, or the bears.
Citigroup's (ticker: C) fourth-quarter-earnings report has the potential to decisively push the stock above $5, or sentence the $4.85 stock to that murky area of penny stocks that is picked over by hordes of individual investors, and needed by hedge funds and others sophisticates making big bets on stock gyrations.
The most widely held Citigroup options are January $5 calls that expire this year, and in 2012.
For now, it is hard to say what forces are really in charge of Citigroup. The stock has advanced along with the financial sector on the assumption that the Federal Reserve's latest meddling in the economy and financial markets soaked up much risk and rigged conditions to favor financial stocks.
But in the options market, bulls and bears bounce Citigroup's stock back and forth like a tennis ball....MORE