Royal Bank of Scotland Strangle Trade
Pays Off!

by Ian Harvey
October 13, 2019


Royal Bank of Scotland Group PLC (NYSE: RBS)

British bank shares jumped amid optimism that a U.K. deal to leave the European Union would support domestic lenders. Ahead of the Oct. 31 Brexit deadline, new British Prime Minister Boris Johnson touted a "pathway to a possible deal" to leave the European Union (EU).

Royal Bank of Scotland stock closed the day up 12.15% at $5.54, its biggest one-day percentage gain in eight years. In addition, RBS stock volume paced an annual high. The security earlier peaked at $5.78, up as much as 16.4%, right around its 160-day moving average. This trendline ushered RBS lower through most of 2018, and hasn't been toppled on a daily closing basis since April. Since touching a two-year low of $4.33 on Aug. 15, the stock has bounced 27%.

The surge came after European Council President Donald Tusk said he’d received “promising signals” that a Brexit deal is possible, following talks between U.K. Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar.

The Recommended Trade on Royal Bank of Scotland.....

I recommended investing in Royal Bank of Scotland because it is exposed to Brexit in a big way, actively conducting business in the U.K. A positive Brexit would send shares soaring, and a negative Brexit would send shares plunging.

A big event like that is a great opportunity for us.

The only problem is...

.....We don't know what will happen or which side of the trade to play.

That's why it's smart, in some cases to play both sides.

Ireland news outlets announced that the Irish prime minister and the British prime minister had come to an understanding that could lead to a viable solution.

That's all the information Royal Bank of Scotland needed to send the stock price soaring Friday morning.

This resulted in a 272% potential profit for our position!

A Great Profitable Trade!


Join us today and see what  future trades will be recommended!

However, The Uncertainty Persists.....

Royal Bank of Scotland Chairman Howard Davies has said there is “considerable uncertainty and considerable nervousness” in the U.K. economy. Some lenders have taken provisions to prepare for an economic slowdown and a surge in bad loans in event of a departure from the EU without a deal, and RBS is unlikely to hit profitability targets next year.

Royal Bank of Scotland shares still trade below the levels seen before the EU referendum that set the course for Brexit in June 2016.

RBS is also under pressure from the prospect of a new election, as Jeremy Corbyn, leader of the opposition Labour party, has considered halting disposals of the government’s majority stake.

But the Smart Money is Optimistic…..

Bullish hedge fund positions have increased. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Renaissance Technologies was the largest shareholder of The Royal Bank of Scotland Group, with a stake worth $30.6 million reported as of the end of March. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $1.1 million.

Where to now?

Once again, it looks like options traders are expecting more gains for Royal Bank of Scotland shares after the Oct. 31 Brexit deadline. The November 6 call was most popular on Friday, where buyers were expecting the security to reclaim the $6 level before options expiration.


Where to now for Royal Bank of Scotland?

Will we recommend another options trade on Royal Bank of Scotland?

What will “Stock Options Made Easy” advise members to do?

Join us today and find out!


An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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