Im pretty sure this can also be an engineered trade for smart money. I imagine it like this: 1. Place some money in bank. 2. Wait till bank bought bonds, tre

Im pretty sure this can also be an engineered trade for smart money. I imagine it like this: 1. Place some money in bank. 2. Wait till bank bought bonds, treasuries and all that jazz. 3. Short the banks stock. 4. Withdraw huge amounts of money and cause liquidity crunch. 5. As the bank needs to keep its capital ratio above 5%, it will close positions at a loss, causing a death spiral (the bank run. As more people want to secure what’s left, the bank needs to unwind more positions at a loss. Which will cause even more people wanting to withdraw, which results in even more selling of the bank. 6. Eventually the bank becomes insolvent. 7. Buy stock back. There might be more variables to it, such as the price of the treasuries itself (you might want to wait for a rate hike, inflation, credit rating change or whatever before you make the bank sell), but generally this is how imagine such a trade.