CapitalSource Topped Out?
January 19, 2010 4:19 PM
Regional Bank, CapitalSource (NYSE: CSE) is seeing a large bearish trade this afternoon; the June 5 calls have been sold 9,600 times for 0.70 on open interest of only a few hundred contracts. This comes on the heels of an upgrade by Barclays on the 15th. The stock has been running higher and higher over the past few weeks, but is currently testing a strong resistance level around $5.
CapitalSource has struggled to get above $5 a number of times and it looks like this trader is betting that it will not this time either. It is most likely that this trade occurred as an income generator on existing long shares as selling calls in the money so far out seems downright foolish.
If the stock were to break through to the upside the next target level would be $7.50.
