Hey Trader,

You already know that I like to follow the money … the Big Money, that is.

But I’m not the only one.

Big Money also likes to follow Big Money … so it’s not uncommon that when you see one big move in an equities pits, there’s another to follow.

But … earlier this week, there was some unusual volume that followed “unusual volume” …

And hours before we saw this second Big Money move come through, the equity in their crosshairs was busy wreaking havoc with their own unusual volume … 

So let’s take a look at some unusual volume …

That just happened to precede some VERY unusual volume …

Citigroup (Ticker: C) is in the middle of a long-term downtrend. Though occasional pops have presented themselves over the past few months, the financial stock has largely failed to hang on to any upside, and in 2022 has seen its downtrend accelerate.

On Friday, the shares closed at a new annual low, and hit an even lower intraday price during the trading day on Monday, though the shares ended the day 1% higher, closing at $48.71 … still quite a ways off their early 2022 highs over $68.

In spite of the disappointment on the charts, C has been the target of quite a bit of bullish Big Money over the last few trading days …

On Friday, one trader bought 10,000 contracts of the June 17 52.5-strike calls, paying $1.10 each. That’s an outlay of $1,100,000 looking for C to reverse its recent leg lower, and recover more than 11% over the next seven weeks.

Then, on Monday, even more Big Money poured into C’s pits, targeting even bigger gains in the weeks ahead …

This trader paid $0.29 for 17,852 contracts of the June 57.5-strike calls, for a total of $517,708, and they seem to be hoping that C manages to return to levels not seen since mid-March.

However, hours before the second trader made their move, C was busy wreaking havoc with their own unusual volume … which had some pretty large consequences in foreign markets!

European markets were hit with a sudden flash crash during Monday’s trading hours.

Nordic stocks in particular were hit hard, losing as much as 7.9% before recovering to close around 1.9% down on the day. However, markets all over Europe felt the effects from the sudden sell-side volume, which only lasted for about five minutes around 10 a.m. ET central European time.

What caused this freak event?

It seems the issue is likely algo trading … specifically, an erroneous algo trade out of Citigroup!

C did confirm that one of its traders had “made an error when inputting a transaction,” though they went on to say that they identified and corrected the error “within minutes.”

The problem was compounded by a public holiday, so the already-thin trading volume was especially susceptible to being pushed around by such an error.

C officials still haven’t confirmed exactly what it is that caused the flash crash, but it seems like all has already been forgiven on this side of the pond … at least according to C’s movement on the charts in the days since!

So it seems like the bullish move on C following their foreign markets blunder was onto something …

And C seems to be getting away relatively consequence-free (for now) after fat-fingering some unusual volume of their own!

Your Only Option,

Mark Sebastian