Oppenheimer's National City Upgrade Spurns Options Activity (NCC)

Right after noon today, our screen for most active call options pointed out the movements in shares of National City Corporation (NYSE: NCC).  We already noted that famed Oppenheimer banking analyst Meredith Whitney actually upgraded her rating of National City to an "Outperform" rating from a prior "Perform" rating this morning.  But because of the woes of troubled financial stocks and the hated take-under buyouts, this stock has followed most of them lower again this morning.

CALL   Strike   Volume    OpInt
OCT-08 $3.00    23,770    6,061
OCT-08 $4.00    11,705    24,897
OCT-08 $5.00    4,895      49,084
OCT-08 $6.00    2,591      59,036
NOV-08 $3.00    6,576      1,649
NOV-08 $4.00    595        10,367
JAN-09 $2.50     5,737      9,319
JAN-09 $6.00     1,925     200,668

As of 12:17 PM EST shares of National City are down 46% at $1.97 onmore than 180 million shares.  That $5.00 target didn’t seem so highbased upon Friday’s close, but now that is a gain of 150% if it isachieved.  It seems that some traders are deciding to opt of of buying stocks and using de-leveraged options strategies where they can limit their downside if a government assisted "take-under" comes their way.

Jon C. Ogg
September 29, 2008