First Republic Bank Options Traders Betting On Stock Continuing To Plunge

First Republic Bank FRC shares dropped sharply on Monday after S&P Global downgraded the bank's credit rating. Jamie Dimon, CEO at JPMorgan Chase & Co. JPM, is leading talks with other leaders of prominent banks to resolve the First Republic Bank crisis, the Wall Street Journal reported on Monday.

On CNBC’s "Options Action," Mike Khouw of Optimize Advisors said First Republic traded at 5x average daily options volume and puts outpaced calls on Monday.

Don’t forget to check out our premarket coverage here

There were buyers of 68,600 of the weekly March 5-puts at an average price of $0.40 per contract, Khouw mentioned.

The trader sees First Republic’s stock continuing to plunge by the end of the week.

Price Action: First Republic’s shares dropped 47.1% to settle at $12.18 on Monday, but bounced 22% in premarket trading on Tuesday.

Check This Out: Insiders Selling Pfizer And 2 Other Stocks