The top trade in the US equity market Thursday is an order of 50,000 of the Citigroup (C, news, chart) September 15 puts that traded along with 20,000 September 20 puts. Sources on the PHLX, where the trades happened earlier today, tell us that a customer bought the 15s for .54 cents and sold the 20s for $2.35. The action seems to be part of a substantial ratio spread, which would represent a bet that Citi shares will drift lower and possibly settle near $15.00 by September options expiration. The profit zone for this ratio spread is between, roughly, $12.50 and $19.00. C was trading at $18.56 at that time.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.