In more fallout from the sub-prime debacle, HSBC Holdings announced this morning that it will close its non-prime wholesale mortgage lending arm, Decision One Mortgage, resulting in the loss of 750 jobs. The company said that it will focus on originating and servicing loans through its consumer lending branch network under the HFC and Beneficial brands. It's no longer sustainable and not the right place to allocate capital in the future, said CEO Michael Geoghegan.

Investors are reacting positively to the news, as HBC has added nearly 1% in today's trading. Furthermore, the stock benefited greatly from the Fed's rate cut, adding about 3% on the week so far, and retaking its 10-week and 20-week moving averages for the first time since mid-July.

On the sentiment front, there is room for additional upside for HBC, as pessimism plagues the financial concern. Currently, the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.35 indicates that puts more than double calls among near-term options, while this ratio ranks above 74% of all those taken during the past year. An unwinding of these bearish bets could provide additional buying pressure for HBC.