MARTIN SLANEY<br /><strong>HEAD OF DERIVATIVES, GFT</strong><br /><br />ONE of the most popular CFD stocks right now is Citigroup, but perhaps what is surprising is the direction of trades – everyone is buying. But what is attracting people to a bank, which was fighting for its very survival earlier this year?<br /><br />It is certainly an impressive turnaround in the popularity stakes for the New York-based bank. The first of three bailouts came in mid-October of last year and was shortly followed by another $20bn in November. But even this proved insufficient and yet another rescue deal to boost the bank’s capital ratios was announced in February. The bailouts cost the equivalent of $1,000 per American citizen and came in for much criticism.<br /><br />Rather than easing concerns over the future of Citigroup and the stability of the finance sector in general, the successive government measures raised fears that there may be even more money needed, or even that nationalisation was a possibility – in which case shareholders would be wiped out. In such an environment it would have taken a brave soul to go anywhere near Citigroup.<br /><br />Time seems to have proven a remarkable healer as Citigroup shares are now being lapped up. “Buy when everybody else is selling” is one of Warren Buffett’s famous rules, and it clearly would have paid off with Citigroup. Amid record trading volumes the shares smashed through $4 on Friday. <br />Surely the price itself is one of the most attractive aspects of the stock. Whether or not you believe in the very fundamentals of the business – its book value is supposedly around $4.30 a share – at $4 a share there’s a clearly limited downside. As a speculative play it’s hard to beat. And with the run of better-than-expected positive economic and corporate news we are seeing, Citigroup shares are the ultimate recovery trade.<br /><br />As the US economy and investor optimism improve, so too can Citigroup’s retail-intense business. If I were pressed for a personal view I’d say there was still some upside left, so a limit order set around $7, just beneath the more realistic 1.5 to 2 times book value which JP Morgan or Wells Fargo shares enjoy, with a tight stop at $3, could be the value play.