Visa Puts Near All-Time High Post-Durbin

 

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September 19, 2011

Bloomberg reports that Visa option traders are growing increasingly wary, fearing the Federal Reserve’s new debit rules will affect the company more than MasterCard.

“Three-month puts to sell San Francisco-based Visa should the stock fall 10 percent cost 1.29 times more than calls, near the all-time high of 1.30 on Sept. 14, according to data compiled by Bloomberg,” the news site reports. “The price relationship known as skew is 1.21 for Purchase, New York-based MasterCard, down from an 11- month high of 1.31 on June 20, the data show.”

Visa processed $1.05 trillion in payments last year – three times more than MasterCard. Yet MasterCard’s rally after the Fed’s rules were released was nearly double that of Visa’s.

“Visa forecast that revenue will increase about 10 percent in 2012, according to a filing on July 6, a week after the Fed’s decision,” continues Bloomberg. “The projection from Visa, which handled $5.6 trillion in transactions during the year ended June 30, compared with its estimate for 2011 sales to rise 11 percent to 15 percent. MasterCard predicts its sales will grow 12 percent to 14 percent a year through 2013, according to a slide show posted on the company’s website Sept. 15.”

Click here to read more on Visa’s projected growth rates post-Durbin.


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