From: "Ens, Amanda" <1 To: "Jeffrey E." <[email protected]>, Richard Kahn Subject: Financials: buy XLF Mar17 $22 call with $26 KO for $0.87 with full premium rebate on KO Date: Thu, 17 Nov 2016 18:05:47 +0000 Attachments: Future_of Financials_Conference_Takeaways.pdf Inline-Images: image001.png Our Financials Conference was this week and client attendance was up by 66% from last year. Yes, banks/financials might pull back at some point after this run-up but we would be buyers on any pullbacks and we continue to see further upside from multiple expansion and earnings growth. Our analyst raised her price targets by —11% across the board. The long term rotation from bonds and div stocks into sectors like financials is only beginning. Vol is higher on the week; what prices well now: Buy the XLF March 2017 $22 call with $26 Knock-Out (continuous) for $0.87, with a full premium rebate if knock-out occurs. This prices attractively given flat call skew and if XLF breaches $26 and this knocks out, at least you get your premium back. Please find our Financials report attached. Future of Financials conference hosted 90 public and private companies at our Future of Financials conference. We are raising our price objectives across most of our names. Three primary reasons why we think there is upside remaining after the recent rally: 1) an improved outlook on both activity levels and interest rates, driving revenue upside; 2) potentially lower regulatory burden, particularly as new supervisory leadership can come with the new administration; and 3) relatively lighter positioning in US financials vs. other sectors. (Erika Najarian) From: Ens, Amanda Sent: Monday, November 14, 2016 12:05 PM To: Jeffrey E.'; 'Richard Kahn' Subject: RE: Financials trade for Monday We continue to see buyers of XLF today. Funds are underweight financials in all regions, valuations are reasonable, earnings are improving and financials tend to outperform when bond yields ris