Citigroup (C) NewsBite - C Sinks on SEC Probe

Posted on Friday, August 01, 2008 1:34 PM

Citigroup (C) opened at $18.95. So far today the stock has hit a low of $18.1 and a high of $18.95. C is now trading at $18.38, down 0.31 (-1.66%). After hitting a one-year high of $49.9 last August, the stock hit a one-year low of $14.01 in July. C shares are declining today after the company reported that the Securities and Exchange Commission has opened a formal probe into possible violations of federal securities laws in connection with the sale of auction-rate securities. The SEC is examining whether banks misrepresented the riskiness of auction-rate securities to investors. Technical indicators for C are neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating. For a hedged play on this stock, consider a September bear-call spread above the $22.50 range. C hasn't been above 22.50 since May, and could gain up to 22.5% before this trade loses money. [LHF- Seven Summits Strategic Investments NewsBite]