Brian Kelly Is Bearish On Regional Bank ETF (RKH)

On CNBC's Fast Money Final Call, Brian Kelly said that he took a short position in Regional Bank HOLDRs (ETF) (NYSE: RKH) this morning. He thinks that Moody's Corporation
(NYSE: MCO) downgraded the ratings for financial companies today, because banks are no longer too big to fail.

This will increase the cost of borrowing for banks, because the borrowers will have to price in the default risk. The impact of lower rating will be more evident for the smaller banks, and therefore Brian Kelly decided to short Regional Bank HOLDRs (ETF) (RKH).

Regional Bank HOLDRs (ETF) (RKH) fell 1.28% today, and closed at $78.50. It trades on a light volume, and today it had a volume of 220K traded shares.