From: Tazia Smith To: jeevacation(kgmail.com Cc: Paul Morris < , Vinit Salmi < >, Nay Gu to >, , Vahe Stepanian Subject: B XLK Calls - low implied vol [I] Date: Wed, 22 Jan 2014 16:46:43 +0000 Inline-Images: unnamed; unnamed(1); unnamed(2); unnamed(3); unnamed(4); unnamed(5); unnamed(6) Classification: For internal use only Jeffrey - Nav highlights XLK OTC calls below; we like this big-cap US tech underlier. The listed market offers comparable low implied vol entry point. The March $37 strike calls are offered —72bps (offer vol: 11.9%). Jun $38 calls are offered —1% (offer vol: 11.8%). Spot reference of $35.88 on XLK. Meanwhile, your AAPL shares are up —1.1% ahead of earnings on Monday, largely due to Ichan tweeting today that he has been buying (source: Bloomberg, 1/22/14). January implied vol on AAPL shares is over 40% ahead of the earnings announcement (skew is fairly flat between 80-120%). Note: Jan31 $575 strike are presently $7.35 (-1.3%) bid (vol offer: 43.3%, $555.35 spot ref). You could sell those if you're more bearish than Ichan into earnings! (i suggest that tongue-incheek, i suspect you'd rather just keep the upside potential in your shares, but let us know). Let us know your thoughts on XLK. Best Regards, Tazia Indicative levels only. Subject to market movement. Source: Bloomberg, 1/22/14. Tazia Smith Director I Key Client Partners - US Deutsche Bank Securities Inc Deutsche Asset 8 Wealth Management 345 Park Avenue. 26th Floor New York. NY 10154 Email Passrio-frPe✓ftnit. -- Forwarded by Tazia Smith/db/dbcom on 01,22/2014 10:45 AM --- From: Nav Gupta/db/dbcorn@DBEMEA To: Date: 01(22(2014 09:43 AM Subject: OTC Call options on XLK US (tech) look good value at 13-14% vol [I) EFTA01148055 Classification: For internal use only XLK is a $13.7bn tech sector ETF. Investors bullish tech should consider short dated OTM calls on XLK which combine low levels of implied vol and an efficient underlying Trades: Buy 3m expiry XLK 3% OTM call @ 1.24% (offer vol: 12.8) Buy 6m expiry XLK 6% OTM call @ 1.44% (offer vol: 13.6) Spot ref: XLK Index = 35.85 XLK top 10 Holdings AAPL 14% GOOG 9.3% MSFT 8% IBM 5.6% T 5.1% VZ 4% QCOM 3.7% CSCO 3.5% V 3.4% Past Returns and Implied Vol ly Return 2y 3y Implied Vol 2month XLK US EQUITY 22% 34% 38% 13% AAPL US Equity 9% 28% 63% 28% GOOG US EQUITY 66% 99% 90% 24% MSFT US EQUITY 33% 22% 27% 25% IBM US EQUITY -4% -1% 18% 19% T US EQUITY 0% 10% 18% 14% VZ US EQUITY 11% 24% 35% 18% ORCL US EQUITY 9% 34% 18% 21% QCOM US EQUITY 17% 30% 47% 18% CSCO US EQUITY 9% 15% 8% 24% V US EQUITY 46% 133% 223% 23% Compared to most of its components, XLK has relatively low implied volatility vs returns XLK Price EFTA01148056 910/111401WITIOUNIbilv MOOCH/ NORM 001,11.11101:041.1410M WOOS WO PCOMmoiro Roma . 2242n.204111217 ■ last Price 35.93 Mph an 01/15/14 35.96 •Average 25.654 I Law en 03/09M 13.22 2009 2010 7011 2012 2013 20 Short dated implied volatility is low i: 52932 ■ Hist Vol (500) 9.113 ■ Implied Vol 12.34it Sal SO 40 30 20 ow. 1034 10 UM: 8. . : 2009 2010 2011 2012 2013 201 mb.rg Finance . n -An-2014 12:50:25 Blue Line Implied Vol I White Line Delivered vol KCP Capital Markets London Vinit Sahni I Nav Gupta I Vanshree Verma Nav Gupta Managing Director Deutsche Bank AG. Filiale London Deutsche Asset & Wealth Management 1051108 Old Broad St Pinners Hall). EC2N tEN London, United Kingdom Email My proposed ideas are being delivered to you by the DeAWM Key Client Partners ('KCP') London desk for discussion purposes only. and do not create any legally binding obligation on the part of Deutsche Bank AG and / or its affiliates ("DB"). These ideas are for the consideration of the intended recipients of this mail only. The KCP London desk does not provide investment advice. All intended recipients are Professional investors (as defined by MiFID). who understand the strategy, characteristics and risks associated with any ideas proposed herein and will be able to evaluate it independently. All trades on proposed ideas shall be subject to the EFTA01148057 relevant internal approvals prior to execution. Pan-io-pcfr Pei farm. This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and delete this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Please refer to for additional EU corporate and regulatory disclosures. This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01148058