EFTA01793573.pdf

From: Vahe Stepanian Sent: Wednesday, October 15, 2014 8:21 PM To: jeevacation@ maitcom Cc: tazia.smith daniel.sabba richardkahn Subject: Re: Fw: AAL + US Airlines (C) Classification: Confidential Got it Jeffrey - market is currently closed. Will work the following tomorr=w morning: Sell to close 1000 AAL Jan'15 20 Cal=s Buy to close 1000 AAL Jan'15 20 Puts=/font> Thank you, Vahe From: "jeffrey E." <[email protected]> To: Vahe Stepanian/db/dbcom@DBAmericas, Date: 10/15/2014 03:46 PM Subject: Re: Fw: AAL + US Airlines [C]qtable> unwind On Wed, Oct 15, 2014 at 2:21 PM, Vahe Stepania wrote: 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 ML position)? Thanks, Vahe EFTA_R1_00126686 EFTA01793573  Forwarded by Vahe Stepanian/db/dbcom on 10/15/2014 02:18 PM From: Vahe Stepanian/db/dbcom<=font> To: "Jeffrey E." <'eevacation@ mail.com <mailto [email protected]»@DEUBAINT Cc: tazia.smit , daniel.sabb richardkahn Date: 10/15/2014 11:48 AM Subject: Re: AAL + US Airlines (CI Classification: Confidential Jeffrey - to clarify, which would you like me to do: A) Unwind existing AAL position and/or 8) 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 ML position)? Thank you, Vahe From: "Jeffrey E." &=t;jeevacation@gmailcom</=» <mailto:[email protected]> To: Vahe Stepanian/db/dbcom@DBAmericas, Date: 10/15/2014 11:37 AM Subject: Re: ML + US Airlines (C) sell it all On Wed, Oct 15, 2014 at 11:24 AM, Vahe Stepanian rote: Classification: Confidential Good Morning Jeffrey - quick update on AAL. Recall you currently hold the following position: 2 EFTA_R1_00126687 EFTA01793574 Please let us know should you wish to hold or add to the position. Separately, Vinit / Nav's team in London is highlighting US airlines (majors specifically) per the below. To summarize, they believe selling lm puts to monetize implied volatility around the 60% level is attractive with 3Q earnings on tap and volatility rising across equity markets. Details included below. Thank you, =br> Vahe Forwarded by Tazia Smith/db/dbcom on 10/15/2014 10:46 AM -font size=3> From: Uzair Aqeel/db/dbcom@DBE=EA To: Nay Gupta/db/dbcom@DBEMEA, Vinit Sah=i/db/dbcom@DBEMEA, Date: 10/15/2014 08:38 AM Subject: KCP Capital Markets Ideas - US Airli=es (II 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 (lm 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) 3 EFTA_R1_00126688 EFTA01793575 - 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) <=r> THIS MATERIAL IS INTENDED FOR INSTITUTIONAL CUSTOMERS ONLY AS DEFINED BY FINRA 4512(c). The trading and investment ideas discussed herein are general and do not take into account an institutional client's particular cir=umstances (including tax situation), investment guidelines, investment goals, restric=ions or needs. Deutsche Bank ("DB") is not acting as a legal, financ=al, 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&U=217; informational purposes and is a general solicitation of derivatives business for the purposes of, and to the extent it is subject to, §§ 1.71 and 23=605 of the U.S. Commodity Exchange Act. 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