Will Citi Break $5? (NYSE:C)

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It has been a wild ride for investors of Citigroup as over the last 12 months share have ranged from $3.11 to $5.07, for about a 40% spread.  Citigroup Inc. (NYSE:C) shares are treading just below that 52-week high of $5.07 as shares are currently trading at $4.96, up 1.22% (+$0.06) on volume of 347M shares traded.

The fourth-quarter-earnings report for Citi is due out on January 18 and it has the potential to decisively push the stock into new 52-week highs, or sentence it to penny stockdom where investors work more like junk collectors looking to make a buck.

For now, it is clear that the Q4 earnings call is an important one.  It can mark a major turning point for the stock as investors are playing the stock for all its worth via leverage in the options market.  Currently, the most widely held Citigroup options are January 2011 $5 Calls, which expire January 21 just after the earnings call.

It is difficult to say where Citigroup will land in 2011.  The financial sector has definitely pulled Citigroup up along with it during the recent sector advance.  The Fed has done its work to reduce risk and increase conditions that favor the financial companies.  The moment for Citigroup to shine is now, and the earnings call is projected for $0.08/share, so here’s to hoping it is just $0.01 above that mark. 

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