By Jud Pyle, CFA, chief investment strategist for the Options News Network

Shares 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.

What is interesting about this activity is that over half of the volume has been dominated by buyers, which has served to push up the implied volatility of the puts even as a seller recently came in to sell 8,500 after 10,000 had been bought. Last night, the puts closed at 85 cents with the stock at $20. That computed to an implied volatility of 205. Now with the options at $1.75 and the stock at $16.80, that is an implied volatility of 247.

It is worth noting that this drop in PNC is coming even as the shares do not have any company-specific news. Rather, the stock is down along with shares of other banks, both large and small. But PNC's slide is far outpacing any of the others. It is worth remembering that PNC purchased/saved National City in October and closed the deal Jan. 2. As we are all too aware, we have seen instances where the acquired company has destroyed the equity value of its buyer, like a virus killing its host. Wells Fargo ( WFC) bought Wachovia, and Bank of America ( BAC) bought Merrill.

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.
Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."