Novice Trade: Regional Banking ETF

The mid-cap banks have taken it on the chin with the tanking of interest rates in the near term. I think there is a real overreaction in interest rates, as it appears the Fed is going to unwind its balance sheet and keep raising rates. The idea that rates could get to 1% or 1.5% and the 10-year at 2.5% is probably not in the cards. I think these names have more upside and, in addition the implied volatility in the S&P Regional Banking ETF (KRE) is pretty low heading into earnings season.

I can buy the June $55 calls, which will be around a rate hike for about $1.50. That is pretty cheap given the potential for the underlying to get to $60....8 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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