re: A plug for fergyl ...... this might be helping If you needed...

re: A plug for fergyl ...... this might be helping If you needed an explanation why banks rallied hard, here you go: Options expiry. Therefore, NAB and CBA both seemed to get “pushed” yesterday afternoon toward key expiry strikes. Thus, logically, they should theoritically lose that premium this morning (maybe on the open?). To put a number on it: NAB jumped 40c in two hours…and that was without the buyback being present. We retain the view that some banks – NAB is and has been our favourite bank for more months that I can remember – should be bought on weakness. Thus, any weakness today which might come about should be seen by traders as an solid BUYING opportunity. Why? With HomeSide (Homicide) out of the way and that noose that was hanging over NAB management now gone, analysts should be breathing a sigh of relief. Also helping is that fact that the buyback now has around A$2.2bn to play with (yes that billion, not million). One more reason to BUY on WEAKNESS: NAB trading in the US (the ADRs…) was interesting: close was $34.80 with VWAP on the session at $34.57. Volume through was high. We have a $40 price target on the stock which – particularly after heartening comments from management on Wednesday, we view as achieving sooner rather than later. One more point: we will start watching the ASX 200 Index rebalancing that is due to be completed by 30 September with some interest next month. In short, it means buy (big) banks (ex: NAB, CBA) and sell NCP. You heard it here first…

For the Bulls: NABWZD (Sept, $34) DELTA 16
(very high delta for a trading warrant, market leading volume)
For the (Highly leveraged) Bulls: NABIZD (Jan, $28) DELTA 80
For the Bears: NABWZQ (Sept, $30, PUT) DELTA –3
For the Bulls: CBAWZG (Sept, $33) DELTA 10
For the (highly leveraged) Bulls: CBAIZD (Jan, $28) DELTA 80
For the Bears: CBAWZR (Sept, $30, PUT) DELTA

Article was posted FRIDAY

Fitzman