Three Standout Trades Emerge from First Horizon’s 11 Unusually Active Options

Core Insights - First Horizon (FHN), a regional bank based in Tennessee, reported reasonably strong Q3 2025 results, but the stock declined nearly 10% on the announcement, possibly reflecting the adage "Buy on rumor, sell on news" or concerns raised by JPMorgan & Chase CEO Jamie Dimon [1] - The stock price drop erased 75% of the gains for long-time shareholders in 2025, although they remain up 98% over the past five years, significantly outperforming the iShares U.S. Regional Banks ETF (IAT) [2] - FHN experienced a significant increase in options trading volume, with 173,468 contracts traded, marking the second-highest daily volume in 2025 and 5.8 times the 30-day average [2][3] Options Activity - The unusual options activity for FHN included 11 notably active options, comprising eight calls and three puts, with two trades ranking in the top 12 [3][4] - Among the eight calls, three had expiration dates around 90 days, indicating a strategic interest in short-term movements [7] Investment Strategy - A Stock Repair strategy, also known as a Covered Ratio Spread, is suggested for investors holding FHN shares, aiming to recover some or all of the original investment while not purchasing additional shares [5][6] - The strategy involves buying one ATM call and selling two calls at higher strike prices, specifically recommending a long $21 call expiring on January 16, 2026, while selling two short calls at either $22 or $28 [6][8]