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Rising Interest Rates

Rising Interest Rates

5.68k followers20 symbols Watchlist by Motif Investing

The Federal Reserve may raise interest rates from their historic lows of 0.25% toward their historical average of 5%.

Curated by Motif Investing

Background

If interest rates begin to climb, who wins? Given the significant interest income that online brokers, custodian banks, and other financials earn on customer cash balances, they could be the ones poised to profit.

The near-0% rates of recent years have eviscerated the interest income stream for these financials. In normal rate environments, some can derive as much as 45% of their revenue from lending. And while potential homeowners and other borrowers might not be thrilled about it, an uptick in rates could mean quick cash flow for those who hold customer cash, and are well prepared.

How did we choose these stocks?

We identified US-listed stocks and American Depository Receipts of companies that are engaged in activities relevant to this watchlist's theme. We then filtered out companies that have a share price of less than .00 or a market capitalization less than 00 million, and excluded illiquid stocks by screening companies for liquidity i.e. average bid-ask spreads, dollar volume traded etc. Finally the proprietary Motif Optimization Engine determined the constituent stocks. Learn more about how we select our watchlists.

Who made these selections?

Motif is an online brokerage built on thematic portfolios of up to 30 stocks and ETFs. Founded in 2010 by Hardeep Walia, Motif combines complex proprietary algorithms with skilled advisers to develop these thematic portfolios. Learn more about our team.

How are these weighted?

First, we determined each company's percentage of total revenue derived from this watchlist's theme. Second, we applied a pure-play factor to give greater relative weight to companies that derive a higher percentage of their revenue from this theme. Finally, we weighted each company by its market capitalization adjusted for revenue exposure to the theme.

More details on how we build and weight watchlists are available here.

Performance

WatchlistChange today1-month return1-year returnTotal return
Rising Interest Rates-1.98%-11.10%-7.01%+57.78%
^GSPC+0.10%-4.28%+9.78%+3431.60%

20 symbols

SymbolCompany nameLast priceChange% changeMarket timeVolumeAvg vol (3-month)Market cap
SCHWThe Charles Schwab Corporation34.65-0.59-1.67%11:24 am GMT-42.51M9.42M44.65B
AMTDTD Ameritrade Holding Corporation37.49-0.65-1.70%11:24 am GMT-4738.35k3.28M20.28B
FITBFifth Third Bancorp20.21-0.65-3.09%11:24 am GMT-41.82M6.03M14.39B
SIVBSVB Financial Group231.26-6.60-2.77%11:22 am GMT-453.18k304.47k11.97B
KEYKeyCorp11.815-0.24-1.95%11:23 am GMT-44.30M9.36M11.53B
ETFCE*TRADE Financial Corporation48.89-1.13-2.26%11:24 am GMT-4424.87k2.07M10.81B
RFRegions Financial Corporation11.155-0.16-1.37%11:24 am GMT-43.02M8.44M10.71B
CMAComerica Incorporated37.27-1.39-3.60%11:23 am GMT-4652.26k1.65M5.18B
ZIONZions Bancorporation, National Association28.96-0.85-2.85%11:24 am GMT-4347.17k1.65M4.75B
PBProsperity Bancshares, Inc.49.7859-0.64-1.28%11:24 am GMT-4105.14k487.44k4.57B
EWBCEast West Bancorp, Inc.32.16-0.75-2.28%11:22 am GMT-4105.58k773.88k4.55B
FFINFirst Financial Bankshares, Inc.27.22-0.38-1.38%11:23 am GMT-477.17k474.09k3.84B
BOKFBOK Financial Corporation50.05-0.59-1.17%11:22 am GMT-419.17k233.60k3.43B
GBCIGlacier Bancorp, Inc.30.57-0.77-2.46%11:23 am GMT-494.80k405.54k2.92B
IBKCIBERIABANK Corporation43.08-2.46-5.40%4:00 pm GMT-45.27M950.77k2.27B
BXSBancorpSouth Bank18.89-0.33-1.72%11:19 am GMT-449.75k442.74k1.91B
IBTXIndependent Bank Group, Inc.42.21-0.85-1.97%11:23 am GMT-443.54k347.84k1.82B
IBOCInternational Bancshares Corporation26.06-0.63-2.36%11:23 am GMT-438.08k198.74k1.62B
HAFCHanmi Financial Corporation7.97-0.16-1.97%11:22 am GMT-429.56k222.14k244.33M
HBHC----6:07 pm GMT-4---
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  • Benzinga

    Analyzing KeyCorp's Unusual Options Activity

    Shares of KeyCorp (NYSE: KEY) saw some unusual options activity on Monday. Following the unusual option alert, the stock price moved down to $12.4. * Sentiment: BULLISH * Option Type: SWEEP * Trade Type: CALL * Expiration Date: 2020-12-18 * Strike Price: $14.00 * Volume: 1055 * Open Interest: 198Three Indications Of Unusual Options Activity Extraordinarily large volume is one indication of unusual options activity. Volume refers to the total shares contracts traded in a day when discussing options activity. Open interest describes unsettled contracts that have been traded but not closed by a counter-party. In other words, for each contract buyer, there must be a seller. A purchased contract remains open until a seller closes it, and vice versa.Another gauge of unusual options activity is a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset.Contracts with a strike price far from the underlying price are also considered unusual because they are defined as being "out of the money". This occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made because the underlying asset value is expected to change dramatically in the future, and the buyer or seller can take advantage of a greater profit margin.Understanding Sentiment Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price.These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.Using These Options Strategies Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.For more information to understand options alerts, visit https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alertsSee more from Benzinga * Analyzing Ford Motor's Unusual Options Activity * Unusual Options Activity Insight: Bank of America * Unusual Options Activity Insight: L Brands(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.