Sigh - Citigroup is a crazy stock at the moment. You can buy Dec $5 calls on this stock for around 0.66. Small money at risk and potentially a lot of money to be made if it takes off. Let's take a closer look and see what is going on here.
Nice looking daily chart, but there is no handle to the cup at this time. I would expect a handle to form here at the least before a breakout. But to top it off, there are 750,000+ calls sitting at the May 5 spot. Yes folks, you read it right - 750,000+ calls controlling a total of 75,000,000 shares. Add to that the fact that the smart folks in the government are unloading their stock position when they get a good price and trickling in the supply rather than dumping it all at the same time, and you end up with a serious overhead resistance at the $5.00 mark. Now there are also over 250,000 put contracts sitting at the May $5 spot which lend a support.
I am not sure what I will do, but I will watch this and if it drops down towards the $4 point, maybe I'll pick up some call options. But let me be clear. This is not investing. This is simple and pure gambling. If you have some money to lose, you can take a shot if the stock pulls back, but don't complain if you lose it all. (But it does break out and makes a run, it could go anywhere from 7.50 to 21. And a scramble to cover those 100s of thousands of calls could make the rally fast and furious).
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