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On Friday’s CNBC’s Options Action, the crew analyzed the financial sector’s performance since the election. Financials have rallied significantly since the election and has consolidated within a very tight range over the last 5 weeks. Looking at historical performance, a long consolidation period after a strong rally has usually been coupled with a selloff afterwards. Looking at Citigroup, which has larger FX exposure than it’s rivals coupled with a relatively high implied volatility provides a good setup to sell options. Looking for C to stall or move lower, Michael Khouw suggested selling a Mar 60/62.5 Call Spread for a $1.00 Credit.

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