EFTA02591366.pdf

From: jeffrey E. <[email protected]> Sent: Wednesday, October 15, 2014 7:47 PM To: Vahe Stepanian Subject: Re: Fw: AAL + US Airlines (C) unwind On Wed, Oct 15, 2014 at 2:21 PM, Vahe Stepanian > wrote: =font face="sans-serif">Classification: Confidential Jeffery - following up on the below. Would appreciate if you could please clarify whether you wish to: A) Unwind existing AAL position and/or B) Sell puts per the below on DAL, UAL, AAL, and LUV. If B, should we use $500k notional on each name for a total of $2mm total exposure to the underliers (in addition to your existing AAL position)? Thanks, Vahe Forwarded =y Vahe Stepanian/db/dbcom on 10/15/2014 02:18 PM From: Vahe Stepanian/db/dbcom To: "jeffrey E." cjeevacation@gmait=om <mailto:[email protected]»@DEUBAINT, C=: Date: 10/15/2014 11:48 AM Subject: Re: AAL + US Airlines (C) Classification: Confidential Jeffrey - to clarify, which would you like me to do: A) Unwind existing AAL position and/or EFTA_R1_01773821 EFTA02591366  B) Sell puts per the below on DAL, UAL, AAL, and LUV. If B, should we use $500k notional on each name for a total of $2mm total exposure to the underliers (in addition to your existing AAL position)? Thank you, Vahe From: "Jeffrey E." <jeevacation mail.=om <mailto:[email protected]» To: Vahe Stepanian/db Date: 10/15/2014 11:37 AM Subject: Re: AAL + US Airlines (CJ sell it all On Wed, Oct 15, 2014 at 11:24 AM, Vahe Stepanian «=font> <mailtc > wrote: Classification: Confidential Good Morning Jeffrey - quick update on AAL. Recall you currently hold the following position: Please let us know should you wish to hold or add to the position. <=ont size="3"> Separately, Vinit / Nav's team in London is highlighting US airlines (m=jors specifically) per the below. To summarize, they believe selling lm puts to monetize implied volatility around the 60% level is attractivewith 3Q earnings on tap and volatility rising across equity markets. Details included below. Thank you, Vahe Forwarded by Tazia Smith/db/dbcom on 10/15/2014 10:46 AM -font size="3"> Fr=m: Uzair Aqeel/db/=bcom@DBEMEA To: Nay Gupta/db/dbcom@DBEMEA, Vi=it Sahni/db/dbcom@DBEMEA, Date: 10/15/2014 08:38 AM Subject:<=ont size="3"> KCP Capital Markets Ideas - U= Airlines Ill 2 EFTA_R1_01773822 EFTA02591367  Classification: For internal use only The equity sell-off has left US airlines oversold on a technical basis. We are starting to see interest in getting long the sector given the attrac=ive valuations, particularly as the majors are expected to produce record free cash flow this year. Delta Airlines is about 20% off from the September high (Source: Bloomberg, Oct-15, 2014) At the same time, the dramatic drop in oil prices will eventually feed into improved margins. Indeed, this is one of the few US sectors that actually benefit from lower oil prices. WTI crude oil is down almost 25% since the June peak (Source: Bloomberg, Oct-15, 2014) With 3Q earnings on tap through the rest of the month and volatility rising across equity markets, selling lm puts to monetise implied volatility around the 60% level is attractive. Implied volatility has rallied dramatically recently (1m 90% vol for Delta Airlines shown) (Source: Deutsche Bank, Oct-15, 2014) Trades: - Investors take in 3.9% premium for selling Delta Airlines November 30-strike puts (exchange-traded): (Source: Bloomberg, Oct-15, 2014) - Investors take in 4% premium for selling United Airlines November 38-stri=e puts (exchange-traded): (Source: Bloomberg, Oct-15, 2014) - Investors take in 3.4% premium for selling American Airlines November 27-strike puts (exchange-traded): (Source: Bloomberg, Oct-15, 2014) - Investors take in 3.4% premium for selling SouthWest Airlines November 28-strike puts (exchange-traded): (Source: Bloomberg, Oct-15, 2014) 3 EFTA_R1_01773823 EFTA02591368  THIS MATERIAL IS INTENDED FOR INSTITUTIONAL CUSTOMERS ONLY AS DEFINED BY FINRA 4512(c). The trading and investment ideas discussed herein are genera= and do not take into account an institutional client's particular c=rcumstances (including tax situation), investment guidelines, investment goals, restric=ions or needs. Deutsche Bank ("DB") is not acting as a legal, fi=ancial, tax or accounting adviser or in any other fiduciary capacity with respect to any proposed transaction(s) mentioned herein. This document does not consti=ute the provision of investment advice and is not intended to do so, but is only intended to be general information. This material is for our clients=E2 informational purposes and is a general solicitation of derivatives busines= for the purposes of, and to the extent it is subject to, §§ 1.71 =nd 23.605 of the U.S. Commodity Exchange Act. 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