Citigroup Plunges 2.6% Amid Sector-Wide Turbulence: What’s Fueling the Selloff?

Summary
• Citigroup (C) trades at $94.57, down 2.59% intraday after opening at $97.47
• Intraday range spans $94.15 to $97.98, with 52-week high of $97.98 now breached
• JPMorgan Chase (JPM) leads sector with -2.79% decline, amplifying banking sector fragility
• Options volatility spikes as 30-day implied volatility hits 36.47% for key puts

Citigroup’s sharp intraday selloff has drawn urgent attention as the stock trades near its 52-week low. The move coincides with a broader banking sector correction driven by UK tax fears, competitive pressures, and regulatory scrutiny. With turnover surging to 6.38 million shares and Bollinger Bands tightening near critical support levels, the market is recalibrating risk exposure in the sector.

Sector-Wide Tax Fears and Talent Wars Spur Flight to Safety
The selloff stems from twin pressures: UK banks’ exposure to potential tax hikes and JPMorgan’s aggressive talent poaching. Recent reports highlight JPMorgan hiring 100 managing directors from competitors, including Citigroup, while UK banks face investor anxiety over a £20bn fiscal hole. These dynamics have triggered a risk-off trade, with investors rotating out of banking equities into defensive assets. Citigroup’s 2.59% drop mirrors JPMorgan’s -2.79% decline, underscoring sector-wide vulnerability to regulatory and competitive headwinds.

Banks Sector in Retreat as JPMorgan Leads Exodus
The banking sector’s -2.79% decline at JPMorgan has amplified Citigroup’s -2.59% drop, reflecting synchronized selling pressure. UK banks’ recent sell-off over tax fears and India’s cautious foreign investor approach further weigh on sentiment. Citigroup’s 10.77 P/E ratio lags JPMorgan’s 11.2 P/E, but both face similar macro risks. The sector’s 30-day turnover rate of 0.35% suggests liquidity is holding, but volatility remains elevated as buyers hesitate.

Bearish Setup: Key Puts and Calls for Short-Term Volatility Play
• 200-day MA: $77.86 (far below) | RSI: 56.17 (neutral) | MACD: 1.30 (bearish divergence)
• Bollinger Bands: Price at $94.57 near lower band ($91.32) with 30D support at $93.69
• Turnover: 6.38M shares (0.35% of float) suggests moderate liquidity

Two options stand out for bearish exposure: C20250912P93 (Put, $93 strike, 31.82% IV, 137.50% leverage) and C20250912C95 (Call, $95 strike, 28.50% IV, 64.00% leverage). C20250912P93 offers high leverage (137.50%) and gamma (0.0817) for rapid payoff if Citigroup breaks below $93. Under a 5% downside scenario (target $89.84), payoff would be $3.16 per contract. C20250912C95 provides balanced risk with 64.00% leverage and moderate delta (0.48), ideal for a rebound above $95.50. Both contracts have high turnover (12,367 and 61,692 respectively), ensuring liquidity. Aggressive bears should target C20250912P93 into a breakdown below $93, while cautious bulls may test C20250912C95 on a bounce above $95.50.

Backtest Citigroup Stock Performance

Urgent Action: Monitor $93 Support and JPMorgan’s Lead
Citigroup’s selloff is far from over as sector-wide tax fears and talent wars persist. The 30-day MA at $77.86 and 200D support at $71.37 suggest further downside risk, but immediate focus should be on $93.69 (30D support) and $91.32 (Bollinger lower band). JPMorgan’s -2.79% decline signals broader sector fragility—watch for follow-through selling if the 52-week low of $55.51 is tested. For options traders, C20250912P93 offers high-reward potential if the breakdown accelerates. Position sizing should reflect the sector’s elevated volatility.