Navigating Art Market Pitfalls With a Citi Adviser
But global art auction turnover fell by about a third to $9.9 billion last year, according to Artmarket. It's also an increasingly tricky industry to navigate, with many sales private and some high risk, and scams not uncommon. So what are the wealthy buying these days, how safe are these investments, and what should they expect in terms of return?
John Lee and Katia Dmitrieva sit down with Betsy Bickar, senior vice president at Citigroup private bank's art advisory unit. The episode was recorded on March 25, prior to Art Basel Hong Kong, part of the city's Art Week.
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Spotlight on Citigroup: A Look at Wednesday's Four Most Unusually Active Put Options
In Wednesday trading, there were 1,165 unusually active options -- defined as those options expiring in seven days or more with Volume-to-Open Interest (Vol/OI) of 1.24 or higher -- with 679 calls and 486 puts. That's a bullish indicator. However, what caught my eye as I examined yesterday's unusual options activity for today's commentary was Citigroup's (C) four unusually active puts. It had no unusually active calls. More News from Barchart Amazon's $36M Bet on Quantum Computing: What Investors Need to Know Learn From the Post-Earnings Bloodshed in Super Micro Stock and Practice Risk-Management With Options Sweating Today's Post-Earnings Drop in AMD Stock? Here's How Options Collars Could Have Prevented the Pain. Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! You've got three puts expiring next Friday and a fourth nearly 12 months from now. Intuitively, if you're an income-focused investor, the three expiring on Aug. 15 are more appealing because the possibility of expiring out-of-the-money (OTM) is significantly higher. However, if you're interested in owning stock in one of America's biggest banks, the $82.50 strike expiring on June 18/2026 could provide a nice balance between income generation and efficient order execution. I'm not bullish or bearish on Citigroup. If I had to own a mega-cap bank stock, it would probably be JPMorgan Chase (JPM), primarily because Jamie Dimon is an excellent CEO. Before I discuss the four unusually active puts, I'll consider whether Citigroup has any more room to gallop higher over the remainder of 2025 and into 2026. Up 65% in the past year, that might be a tough ask. Are Bank Stocks Expensive? As I said, Citigroup's stock is up 65% in the past 12 months, with nearly half of this return generated since Jan. 1. JPMorgan's up 45% over the past 12 months, with 21 percentage points of the return coming in 2025. The First Trust Nasdaq Bank ETF (FTXO), which owns 50 of America's top banks -- Citigroup is the top weighting at 9.16% -- is up 23.5% over the past 12 months and just 3.9% year-to-date. That suggests investors have been more inclined to buy the larger banks rather than regional bank stocks. According to First Trust's fact sheet, FTXO trades at 12.79 times earnings, 1.27 times book value, and 3.41 times sales. By comparison, Citigroup's multiples, according to S&P Global Market Intelligence, are 15.21x, 0.86x, and 2.32x, respectively. Meanwhile, JPMorgan Chase's three multiples are 17.95x, 2.40x, and 4.87x, respectively. What does that tell us? Relative to JPM at least, Citigroup stock isn't ridiculously expensive despite the run it's on. However, over the past decade between June 2015 and June 2025 (40 quarters), its P/E multiple has been higher than 15.21x on just five other occasions: June 2015, March 2021, June 2024, September 2024, and December 2024. That works out to about 15% of the time that its P/E valuation has been so high. From this perspective, one could conclude that it's fairly valued to overvalued at the moment. With that in mind, let's move on to the four unusually active puts. The Busiest of Them All The Aug. 15 $87 put had a Vol/OI ratio yesterday of 130.79, the highest among puts, and the second-highest overall. Of the 25,504 in volume, 20,000 was for one trade at 10:24 in the morning. That's 97.5% of the overall volume. A big fish was biting. So, the institution or high net worth investor that sold the 20,000 put contracts generated $560,000 in premium income that they get to pocket if the share price doesn't trade below $87 by next Friday. Looking at Barchart's Naked Put page, the probability of this happening is over 90%, virtually a sure thing, and a 9.5% annualized return. That's better than a T-Bill. If you're risk-averse, this is the best of three for income. The Other Two Puts Expiring Next Friday So, the profit probability for the $91 put is 72.48%, and 66.59% for the $92 put. While the risk moves up, so too does the reward, with annualized returns of 38.9% and 55.2%, respectively. If you're reasonably risk-tolerant and don't mind buying 100 shares at $91, I prefer the lower strike price for a slightly higher margin of safety. The Outlier of the Bunch As I said in the introduction, the $82.50 strike expiring on June 18/2026 provides a nice balance between income generation and efficient order execution. From an income perspective, the annualized return based on the $4.85 bid price would be 7.12% [$4.85 bid price / ($82.50 strike - $4.85 bid price) * 365 / 316 DTE]. Now, 7.12% probably doesn't seem like a lot given the lengthy number of days to expiration (DTE). There are two reasons why the return's not as bad as it might appear. First, if you're bullish about the future share price of Citigroup, and you like it at $92 and change, you'll like it even more at $77.65 [$82.50 strike price - $4.85 premium]. It hasn't traded this low since mid-June. Secondly, you can always close out the short put should the share price drop into the mid-$80s. You would pay the prevailing ask price at the time. Based on the $92.23 closing price from Wednesday, a theoretical share price of $85 at the time you close out the short position, and a delta of -0.2758, the ask price at the time would be approximately $7.04 [$92.23 share price - $85 theoretical share price * -0.2758 delta + $5.05 yesterday's ask price], creating a loss of $2.19 [$7.04 - $4.85 premium]. For many, the idea of holding a short put and keeping the position open for nearly a year is probably too long. Most options traders opt for DTEs of 30-45 days, where the risk/reward is more palatable, and the premium income is locked in sooner. Something to ponder. On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Analysis-Investors betting voters in Bolivia will make a turn to the right
By Johann M Cherian and Rodrigo Campos (Reuters) -Bolivia's international bonds have rallied ahead of a fiercely contested presidential election, fueled by investors' hopes that a political U-turn could help shore up the country's fragile economy and pave the way for an IMF program. The South American nation of 12 million people is engulfed in a crisis marked by inflation at a four-decade high, dwindling dollar reserves and a fiscal squeeze in which the government must choose to service debt or pay for fuel and food imports. Bolivia's international bonds, however, have enjoyed a stellar rally since the start of 2025. With a return of more than 30%, they are one of the top performers in JPMorgan's emerging markets bond index, which across the asset class has returned slightly more than 7%. Citigroup recently upgraded its assessment on Bolivian bonds to "neutral" from "underweight." Having started the year below 60 cents, Bolivian government bonds have scaled multi-year highs in recent days and are trading in the mid-70 cent range - well above the 70 cent threshold below which debt is seen as being in distress. A change in government "is likely to be quite positive for the economy, which has been on an unsustainable fiscal and current account position for so many years," said Carlos de Sousa, emerging markets debt strategist at Vontobel Asset Management. "A restructuring could be avoided, particularly if the country gets an IMF program soon after," de Sousa said, adding that turning to the International Monetary Fund for support would be a political choice. Bolivia's political landscape is dominated by a power struggle that has fractured the incumbent left-leaning Movement to Socialism (MAS) party. Polls show it winning about 12% of the vote in the first round of the elections on August 17. Evo Morales, who ruled the country from 2006 to 2019 under the MAS banner, has been barred from running for another term as president. Betting websites peg the chances of a win for center-right businessman Samuel Doria Medina, the National Unity party's presidential candidate, at more than 50%. Favored by markets, he has pledged to restore central bank autonomy, tackle a dollar shortage and take on corruption. To avoid a runoff, which has been scheduled for October 19, a candidate must secure more than 40% of the vote as well as have a lead of at least 10 percentage points. IMF LOAN PROGRAM The election is taking place at a critical time for Bolivia's $50 billion economy. Central bank-financed fiscal deficits have become a major flash point, revenues from gas exports - a big source of hard currency for the government - have dwindled and the central bank has been forced to spend precious reserves defending the boliviano currency's peg to the dollar. The gap between parallel and official exchange rates has blown out to 80%, the IMF says. Despite the recent spurt of optimism, investors remain worried that political infighting and falling gas export revenues could jeopardize the country's ability to service upcoming debt payments - large chunks of which are due in the first quarters of the next three years. Bolivia's external debt amounted to about $13.3 billion by the end of 2024, of which $1.8 billion is in hard-currency bonds and the remainder in multilateral and bilateral loans, according to its central bank. Foreign exchange reserves were at a record low of about $165 million in April, central bank data shows. JPMorgan calculates that the country's liquid reserves are only $100 million. The IMF puts reserves at two months worth of imports - well below the minimum threshold of the equivalent of three months. Earlier this year, the three major credit rating agencies downgraded Bolivia's rating deeper into junk. S&P Global said the economic circumstances could impair the government's ability to service debt over the next six to 12 months. Some relief may come from loans worth more than $1 billion from official lenders like the World Bank and the Japan International Cooperation Agency that have been secured but not drawn down amid government infighting, and which analysts expect could be unlocked by a new government in La Paz. Monetizing Bolivia's vast lithium deposits could also bring in financing. But the real silver lining - at least for investors - would be an IMF loan program. It would, however, require painful reforms. The IMF said in May that the Bolivian government should ditch the dollar peg, lift capital controls and phase out fuel subsidies, among a raft of other policy changes. It estimates Bolivia's economy will grow 1.1% in 2025 and 0.9% next year - less than half the 2.2% growth expected across broader Latin America this year and the 2.4% forecast for the region in 2026. With a balance of payments crunch looming, analysts say, the next government might not have much choice. "All these liberalizing reforms will eventually allow the economy to flourish, but there's going to be some short-term pain as you shut down money-losing businesses, cut fuel subsidies, and unshackle the economy," said Ajata Mediratta, partner at Greylock Capital Management. "Very few countries can do that in an election year."
