CIBC Options Trade to Exploit Vulnerabilities in the Canadian Housing Market

about 1 month ago

Brent Donnelly

"But a lot of the mortgage experts feel like CIBC's portfolio is the most vulnerable. So what I'll do with a trade like this is like take a shot. I'll buy, like, say, I think the CIBC options that I would look at were like in October or some October 17th or something."

Donnelly identifies an inflection point in the overextended Canadian housing market due to rising unemployment and an oversold housing bubble. He specifically singles out CIBC as the poster child for vulnerable mortgage portfolios and recommends a short-term options play on CIBC, suggesting an entry around mid-October. The trade is based on quantitative assessments of market weakness and sector-specific catalysts, offering a concrete actionable bet.