Natwest Group Plummets 3.1% Amid Sector Volatility – What’s Fueling the Selloff?

Summary
• Natwest Group (NWG) trades at $14.805, down 3.1% intraday amid a sharp selloff from its 52-week high of $15.5158.
• Sector leader JPMorgan Chase (JPM) defies the trend, rising 0.52% as Wall Street banks navigate interest rate uncertainty.
• Technicals show RSI at 75 (overbought), MACD above signal line, and price near Bollinger Bands’ upper boundary.
• The banking sector faces crosscurrents: profit declines, capital costs, and regulatory scrutiny, as highlighted in recent sector news. NWG’s sharp drop reflects broader sector jitters, with traders parsing mixed signals from U.S. bank earnings and Fed policy shifts.

Interest Rate Pressures and Profit Woes Weigh on Banking Sector
Natwest Group’s intraday plunge aligns with broader banking sector turbulence, as U.S. banks report declining profits and grapple with capital costs amid high interest rates. Recent sector news highlights Goldman Sachs’ 36% profit drop, JPMorgan’s 35% surge in net interest income, and Citigroup’s cautious restructuring. While JPMorgan’s resilience suggests diversified revenue streams, NWG’s sharp decline indicates vulnerability to margin compression and regulatory headwinds. The stock’s 3.1% drop reflects investor concerns over net interest income sustainability and capital allocation challenges, exacerbated by the Fed’s prolonged high-rate environment.

Banks Sector Splits as JPMorgan Outperforms Peers
While Natwest Group tumbles, JPMorgan Chase (JPM) gains 0.52%, underscoring divergent performances within the banking sector. JPM’s strength stems from robust investment banking and sales trading, as noted in its recent earnings report. In contrast, NWG’s decline mirrors broader European bank struggles, with Irish regulators warning against complacency amid rising rates. The sector’s mixed performance highlights the importance of capital efficiency and diversification, as U.S. banks leverage higher interest margins while European peers face tighter credit conditions and regulatory scrutiny.

Bearish Options and ETFs for a Volatile Sector
• Technical Indicators: 200-day MA: $12.216 (below), 52W High: $15.5158 (near), RSI: 75.0 (overbought), MACD: 0.393 (bullish), Bollinger Bands: $13.53–$15.70.
• Key Levels: Immediate support at $14.64 (intraday low), critical support at $13.53 (lower BB). Resistance at $14.8076 (30D support).
• Options Picks:
• NWG20251017C15 (Call, $15 strike, 2025-10-17): IV 28.09%, leverage 27.44%, delta 0.472, theta -0.0057, gamma 0.252, turnover 939. High leverage and moderate delta position this for a bearish rebound.
• NWG20251121C12.5 (Call, $12.5 strike, 2025-11-21): IV 38.09%, leverage 5.83%, delta 0.835, theta -0.0027, gamma 0.086, turnover 2511. High liquidity and long-dated theta decay make this ideal for a gradual decline.
• Payoff Scenario: A 5% downside to $14.06 would yield $0.06 profit for the $15 call (60% gain) and $1.44 profit for the $12.5 call (144% gain). Aggressive bears may consider NWG20251017C15 into a bounce above $14.8076.

Backtest Natwest Group Stock Performance
The 3-Day win rate for NWG after an intraday plunge of -3% is 59.28%, the 10-Day win rate is 61.93%, and the 30-Day win rate is 69.13%. This indicates a higher probability of positive returns in the short term following the dip.

Act Now: Position for a Sector-Wide Correction
Natwest Group’s 3.1% drop signals a potential sector-wide correction as banks grapple with profit declines and capital costs. Traders should monitor the $14.64 support level and JPMorgan’s 0.52% rally for sector sentiment cues. With RSI at 75 and price near Bollinger Bands’ upper boundary, a pullback is likely. Investors should prioritize options with high leverage and liquidity, such as the selected calls, to capitalize on volatility. Watch for a breakdown below $13.53 or a shift in Fed policy to determine the next move. Action: Short-term bears target $14.64 support; bulls watch JPM’s resilience for a sector rebound.