Bulls Charging into Latin Banks

 |  Includes: BBV, ITUB
by: optionMONSTER

By David Russell

Options turned bullish on two Latin banks as investors continue to seek exposure to commodity-rich South American economies.

BBV Chart

Volume in the June 17.50 calls on Brazil's Itau Unibanco (NYSE:ITUB) surged to 6,587 contracts against open interest of 1,289, according to optionMONSTER's Heat Seeker monitoring system. Overall call volume in the name outnumbered puts by 26 to 1, reflecting a broadly bullish sentiment.

ITUB is up 1.59 percent to $15.94 today and would have to rise another 12 percent for any of the calls purchased to generate a profit. The bank, which recently changed its ticker from ITU, was also the subject of covered call activity earlier in the month and was upgraded to "buy" yesterday at Bank of America.

Spain's Banco Bilbao Vizcaya (BBV), which has extensive operations in Latin America, also received bullish trades as investors sold 4,000 July 12.50 puts for $1.25 against open interest of 253 contracts. BBV is flat on the day at $12.22 this morning. The puts written will remain profitable as long as the stock holds above $11.25 by expiration.

(Chart courtesy of tradeMONSTER)