Trading Options: Citigroup Offers Interesting Call Play
The stock has been moving sharply higher with other financials but has performed the best.
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This is the start of a new options trading column for TheStreet Pro subscribers. Each week, we will bring you some option trade ideas that we find intriguing and compelling. We will not be holding a portfolio of these names, rather just sharing the ideas with you — hopefully you will make some money and learn about the world of options. We will also show you charts where applicable.
Our first idea comes to you as Citigroup (C) , a name I have liked for some time. You'll see in the chart below that the trend is very much bullish and "locked in." A series of higher highs and higher lows is our textbook definition of an uptrend. Looking at the candles, we see a long stretch of blue, which is strongly bullish on the GoNoGo composite of indicators. Money flow (bottom pane) is robust, volume trends are bullish and stochastics (momentum) is strong but is coming in for a "test."
Fundamentals are strong for Citigroup. The company has grown revenue by an average of 35% over the last four quarters and is due to grow earnings more than 28% over 2025 to 2026. With a P/E of 15, C is rather cheap on a relative basis, and with potential deregulation coming and lower interest rates the table is set for a strong move up for this name.
Option Trade: With only a few months left to go in 2025 I am looking at some near the money strikes on Citigroup. My preference would be in the money but the stock is in the middle of two strikes.
Looking at the January 2026 group there is an opportunity to buy the 105 call for about 6.40. This option is about 6% of the stock price (6.4/103) and offers up a nice reward if the stock moves higher by about 6& to 8% over the next three months. There is good open interest and volume has started to pick up.
That is a reasonable expectation (probably too conservative), the stock moved higher by about 12% since the last earnings report in July to the present. Even a 6% move higher puts Citi at $109, and while that is only $4 above the strike price if the stock moves quickly then we can still take advantage of the time decay in the stock. In other words, the intrinsic and time decay should be worth more than 6.40.
As for when to sell, if this works out right we would like to close the trade out somewhere between 8.4 to 9. Remember your risk management rules! We'll have more on this in a later column.
