The rumor on the street is that Deutsche Bank (DE:) has, in recent months, accumulated a huge derivatives book. While not confirmed, the stock chart may confirm trouble for the bank with a major breakdown on Friday’s chart.
Essentially, the rumor is that Deutsche has been selling tons of options on the assumption that volatility would stay low, allowing it to collect the premium. But Friday’s surge could land the firm in a tight spot — unless volatility abates. If DB has to pay off a huge amount of options, it could face BIG losses. The stock broke MAJOR support on Friday, auguring trouble for the bank.