James Ramelli Options Play On Credit Suisse

Shares of Credit Suisse Group AG (ADR) CS are up more than 4.5 percent in the last five days, but that’s not where the action is happening. There was unusual option activity seen in the name on Wednesday and the stock also moved higher.

KeeneOnTheMarket.com Trader James Ramelli was on Bloomberg TV to discuss this and to reveal his trade on Credit Suisse.

The Activity

Was asked the reason for the unusual option activity seen in a name like Credit Suisse which generally doesn’t sees such activity. He replied, “It isn’t a stock that tends to be one of the more volatile names that we see trading. It doesn’t see these huge swings like a lot of names that we usually see this unusual option activity in, but yesterday Credit Suisse traded 5x its average daily equity options volume and most of that equity options volume was on the June 27 call line.”

He continued, “Almost 12,000 contracts traded by the end of the day and almost all of them were bought. So, some institutional player is coming in and taking a stance here on Credit Suisse. It caused implied (volume) in the name to move higher as well and we saw a very nice pop in those options through yesterday’s session. Paper started to buy them right around $0.63 and they closed at around $0.80.”

The Trade

Ramelli revealed his option trader on Credit Suisse saying, “So, we saw a pop in the options here, I want to buy the exact same line as the institutional players. The June 27 strike calls for $0.80. I risk 80 bucks per [contract] with unlimited upside.