JP Morgan (NYSE: JPM) is recently trading at $20.56 in pre-open trading, above its close of $19.51. JPM reduced its quarterly dividend to 5c and provided an inline Q1 update. JPM March 20 straddle is priced at $5.55, June 20 straddle is priced at $9.55. JPM March option implied volatility of 123 is above its 26-week average of 89, according to Track Data, suggesting large price movement.

PNC Financial Services (NYSE: PNC) Financial Services closed at $24.61. PNC March option implied volatility is at 137; June is at 108; above its 26-week average of 77, according to Track Data, suggesting larger near term price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

This post is by a Minyanville contributor:

While regional banks are soaring on news that the U.S. Treasury is buying preferred stock in a number of banks, I would remind readers that while the Treasury's investment boosts "Tier 1 Capital", it does nothing for tangible common equity.

Why does this matter?

Because when losses come or common dividends are paid, they come out of common equity.

On Friday, when PNC Financial (NYSE: PNC) purchased National City (NYSE: NCC), PNC announced that thanks to the U.S. Treasury's purchase of preferred stock, the bank's Tier 1 ratio was increasing from 8.2% to 10%. At the same time, however, the bank disclosed that its tangible common ratio declined from 3.6% to 3.5%.

While it may not feel like it today, some day soon capital quality, not just capital volume, is going to matter.

National City (NYSE: NCC) closed at $3.10. NCC is scheduled to report Q3 EPS on October 21. NCC November 3 straddle is priced at $1.55 according to Track Data, suggesting large price fluctuations.

Citigroup (NYSE: C) closed at $18.62. Citi is scheduled to report EPS on October 16. Citi October 20 straddle is priced at $1.43, November 20 straddle is priced at $4.74, and Citi November option implied volatility of 98 is above its 26-week average of 54 according to Track Data, suggesting larger price movement.

PNC Financial Services (NYSE: PNC) closed at $63.04. PNC is expected to report EPS on October 16. PNC October 62.5 straddle is priced at $6.80, November 62.5 straddle is priced at $13.70. PNC November option implied volatility of 79 is above its 26-week average of 45 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

SunTrust Banks (NYSE: STI) closed at $43.97 Thursday. STI July option implied volatility of 64 is above its 26-week average of 41 according to Track Data, suggesting larger price uncertainty.

PNC Financial Services (NYSE: PNC) closed at $59.73 Thursday. PNC July option implied volatility of 41 is above its 26-week average of 35, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Restaurants, CB Richard Ellis Group Inc (NYSE: CBG) and Jones Lang LaSalle Incorporated (NYSE: JLL) were today's noteworthy initiations:

• Deutsche Bank initiated shares of McDonald's Corporation (NYSE: MCD) and Yum! Brands Inc (NYSE: YUM) with Buy ratings and a $61 target and $76 target, respectively, and shares of Panera Bread Company (NASDAQ: PNRA) and Chipotle Mexican Grill Inc (NYSE: CMG) with Hold ratings an a $54 target and $83 target, respectively.
• Wachovia initiated shares of CB Richard Ellis with an Outperform rating, as it views CBG as a compelling investment opportunity giving its leading position in the top real estate markets and breadth of services.
• Wachovia also initiated shares of Jones Lang LaSalle with an Outperform rating, as it expects JLL to benefit from international services given the increasing flow of real estate dollars across boarders and to less well developed regions of the globe.

OTHER INITIATIONS:

• Citigroup initiated shares of GameStop Corp (NYSE: GME) with a Buy rating and $46 target.
• Citigroup also initiated shares of The PNC Financial Services Group Inc (NYSE: PNC) with a Buy rating and $84 target.
• Soleil initiated shares of Salesforce.com Inc (NYSE: CRM) with a Buy rating and $50 target.
• Goldman Sachs initiated shares of 3M Company (NYSE: MMM) and LM Ericsson Telephone Company (NASDAQ: ERIC) with Neutral ratings.