By Jud Pyle, CFA, chief investment strategist for the Options News NetworkShares of super-regional bank PNC Financial Services ( PNC) are currently down over 15% to $16.80 after falling as low as $16.20. The slide in the stock has spurred some put-buying that suggests that more downside slides, or at least more volatility, will be in the offing for PNC. Looking at the PNC April 10 puts, we see that over 19,000 have traded in the first four hours of trading. The puts are currently trading for around $1.75, with the stock near $16.80. The current open interest in the puts is just 141, according to the Sidewinder report at www.onn.tv.
Put-buying like this does not mean that investors should run right out and sell all of their shares in PNC. However, it is worth nothing that the option market has seen plenty of activity like this in which the put-buying did foretell an oncoming tsunami. Heavy downside put-buying occurred prior to big stock dives in General Electric ( GE), Citigroup ( C) and Bank of America, just to name a few. Maybe this put-buyer is thinking that PNC will meet the same fate. Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.