NatWest Options Turn Bullish Before Thursday's Results

NWG reports third-quarter results on Thursday morning with options positioning telling a more optimistic story than the past several months.

The put/call ratio dropped to 0.88 on Monday, almost two standard deviations below its 20-day average of 1.11. That shift is striking: the PCR has been running above 1.0 for most of the past month, and as recently as mid-September it touched 1.88. The move below 1.0 signals a genuine rotation toward call activity in the final session before the print, not just a mechanical unwind. The stock itself closed at $17.09, up 1.7% on the day but down 7.6% over the past month, so the options shift arrives against a backdrop of recent price weakness.

Short interest is not a meaningful part of the NatWest story heading into results. Borrowed shares have roughly doubled from late September levels, but the absolute position remains tiny, well below 1% of the float, and availability in the lending market is generous. That rules out any squeeze dynamic and keeps the borrow market firmly in the background.

The more substantive debate is about valuation and the interest rate cycle. NatWest trades at 8.1 times trailing earnings and 1.16 times book value, both of which have compressed modestly over the past 30 days. The bank has a strong track record of beating estimates, ranking in the 81st percentile for EPS surprise across ORTEX's coverage universe, and the analyst recommendation differential factor scores at the 91st percentile, suggesting the Street is positioned more constructively than average. Earnings yield ranks in the 77th percentile. The bear case centres on sensitivity to UK rate movements and uncertainty around capital deployment, with forward earnings growth expectations soft enough to sit in the 29th percentile.

One holder worth noting is HM Treasury, which filed a Schedule 13D on NatWest in December 2024. Under that activist registration, the government has reduced its stake from 5.93% to 4.82% as of its most recent filing in March 2025. By falling below the 5% threshold, HM Treasury may not file further disclosures unless circumstances change. As is standard for 13D/G filings, the declared position is as last disclosed and may not reflect current holdings.

The last two quarterly prints produced a 4.8% single-day gain in July 2026 and a 5.2% decline in May 2026. Thursday's release will test whether the bank's net interest income has held up through the recent UK rate environment and whether capital return commitments remain on track.