NatWest Slumps 2.7%—What’s Behind the Drop?

• NWG plunges to 13.21, marking a 2.68% drop from yesterday’s close of 13.62
• The stock trades near its 2025 low of 13.2077 amid UK government exit fallout
• 52-week range remains wide: 8.08 (low) to 14.55 (high) with a PE ratio of 8.31

NatWest’s sharp intraday decline is punctuated by lingering fallout from the UK government’s final stake sale and mixed signals from sector peers, setting the stage for a pivotal trading session.

UK Government Exit Losses and App Outages Fuel Volatility
The 10.5 billion GBP taxpayer loss from the UK Treasury’s final NatWest stake sale—confirmed last month—remains a key overhang. The bank’s recent mobile app disruption, which locked customers out of accounts, amplified operational concerns. Compounding pressure, UBS’s Q3 earnings preview highlighted muted mortgage spreads, a critical revenue driver for UK retail banks like NatWest. While analysts reaffirmed Buy ratings, these near-term execution risks have outweighed the bank’s 42.2 RSI-driven technical neutral zone, triggering today’s sell-off.

Bullish Puts and Near-Term Resistance Levels Dominate Strategy
NWG20250815P15 and NWG20250815C12.5 offer tactical opportunities:

• 200-day average: 11.42 (well below current price)
• RSI: 42.2 (neutral, below 50)
• Bollinger Bands: Price hovers near lower band (13.12)
• MACD: -0.095 (bearish histogram)

Near-term support at 13.12 (lower Bollinger) and resistance at 13.32 (intraday high) will define momentum. Aggressive traders should target puts for further dips. The NWG20250815P15 put (strike 15) boasts 6118 turnover with 45.71% IV and 0.78 delta—ideal for downside bets. Its 2.15% price change and 6.80% leverage ratio make it a high-conviction bearish play. For balanced exposure, the NWG20250815C12.5 call (strike 12.5) offers 570 turnover and 43.42% IV with 0.69 delta, providing gamma exposure to rebounds. In a 5% downside scenario to 12.60, the put’s payoff jumps to 2.40 GBP while the call remains neutral.

Action Insight: Fade rallies above 13.32 with NWG20250815P15 puts into resistance tests.

Backtest Natwest Group Stock Performance
The backtest of NWG's performance after an intraday plunge of -3% shows favorable short-to-medium-term gains. The 3-Day win rate is 57.38%, the 10-Day win rate is 59.59%, and the 30-Day win rate is 64.58%. Although the maximum return during the backtest period is only 3.46%, the overall trend indicates that NWG tends to recover and even exceed its pre-plunge levels in the following days.

Bears in Control—Watch for 13.00 Break
NatWest’s short-term trajectory hinges on stabilizing operational metrics and sector-wide mortgage trends. While JPMorgan’s 0.7% dip signals broader financial sector caution, NWG’s technicals suggest deeper declines if the 13.00 psychological support fails. Investors should prioritize puts for downside protection while tracking Q3 earnings previews for catalysts. Final Alert: Below 13.00 triggers a test of 2023 lows—monitor liquidity at NWG20250815P15 and sector stress signals.