Capital One (COF) Offering Possible 9.17% Return Over the Next 8 Calendar Days

Capital One's most recent trend suggests a bullish bias. One trading opportunity on Capital One is a Bull Put Spread using a strike $69.50 short put and a strike $64.50 long put offers a potential 9.17% return on risk over the next 8 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $69.50 by expiration. The full premium credit of $0.42 would be kept by the premium seller. The risk of $4.58 would be incurred if the stock dropped below the $64.50 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Capital One is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Capital One is bullish.

The RSI indicator is at 60.53 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

---

LATEST NEWS for Capital One

Capital One: Should We Buy Before the Price Recovers?
Tue, 08 Sep 2020 16:04:49 +0000
This credit card and banking firm is modestly undervalued, has reasonable fundamentals and comes with a dwindling dividend

Financials Keep Market from Plunging Even Deeper
Fri, 04 Sep 2020 12:05:10 +0000

Is the Worst Over for Capital One Financial?
Fri, 04 Sep 2020 10:00:00 +0000
Capital One Financial (NYSE: COF) has struggled through net losses in the past two quarters. The COVID-19 pandemic has meant lower spending on the bank's credit cards, high provision of credit losses due to recession-related economic hardships, and 0% interest rates — a triple whammy. Capital One is the ninth-largest bank in the U.S., with $383 billion in assets under management as of June 30, and one of the four largest credit card issuers in the U.S. The credit card business is in fact Capital One's primary source of revenue, making up roughly 64% of its income.

Low Rates, High Costs Hurt Capital One (COF): Time to Sell?
Tue, 01 Sep 2020 13:07:01 +0000
Near-zero interest rates and persistently rising expenses remain major concerns for Capital One (COF) in the near term.

Credit Card Firms Split on Fate of Consumers While U.S. Cuts Aid
Tue, 01 Sep 2020 12:30:00 +0000
(Bloomberg) — A fissure is forming in the U.S. credit card industry: Are consumers about to go bankrupt or bounce back?On one side, risk-management pioneer Capital One Financial Corp. is reining in credit lines to reduce its exposure. On the other, the nation’s largest card issuer, JPMorgan Chase & Co., is rolling out a new card designed for travelers and diners — the ultimate countercyclical bet.Those moves are just the tip of a debate unfolding inside the industry as Congress deadlocks over extending $600 weekly checks to millions of unemployed Americans. In some corners, worries are mounting that households will struggle to make ends meet, max out their credit and default. But some banks see an opportunity to attract people who are still doing fine.“They’re saying, ‘I’d rather be back in a little cautiously, rather than not getting back in at all,’” said Scott Barton, managing partner at 2nd Order Solutions, which advises lenders on credit risk. “It’s not a gold rush — it’s just that things didn’t get that bad.”The card industry pared credit lines 1.3% in the second quarter, the first drop in eight years, as the coronavirus shut down commerce and left legions of breadwinners without work. Yet fears of widespread defaults went unrealized — at least for a while — as the federal government sent out stimulus payments and augmented unemployment benefits through July.That’s created an unprecedented situation: Banks know many customers are out of work — but they don’t know who, because so many keep kept paying their bills. The percentage of cardholders behind by 60 days or more actually dropped to 1.37% in July from 1.61% a year earlier, TransUnion data show.While Democrats and Republicans disagreed throughout August over extending aid, Capital One sent notices to customers, paring back credit lines so that many wouldn’t be able to spend more than they have in the past. The firm said the move stemmed from a periodic review.Lenders are usually loathe to lower borrowing limits because it can erode revenue in the future. Instead, some aim to navigate the crisis with a more optimistic posture, enrolling new customers who typically provide two key pieces of information: their current employment and income.Banks mailed 96 million credit-card offers in July. Though that was down 68% from a year earlier, it was up 69% from June, according to Credit Suisse Group AG analysts.The bet is that there’s pent-up demand from strong borrowers and that the first banks to act on it will gain market share. In the case of JPMorgan, executives said they want to ensure their product is in the hands of customers once they’re ready to go out again.“We are seeing a tension,” said Monica O’Reilly, who leads the U.S. financial services industry group for Deloitte.“There’s this view toward credit risk” that’s typical with high unemployment, she said. But “you’re going to start to see a move toward banks and issuers moving to capture more share.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Related Posts