Nationalize Bank Trade

Bank stocks on Monday morning acting more and more as if it is just a matter of time before the troubled banks are nationalized. As a trader one tries to think ahead of the news event but obviously this one is a bit tough. My first reaction is that since the move has been so powerful on the downside, avoiding the short side on big intervention news is a must. Except for the particular bank stocks, who would be essentially be drilled or become worthless, a significant amount of selling would step back from the market. Depending on the elements of the overall nationalization and details of the remaining stabilization package, voids in ranges could create extreme risk profiles.