As shares approch the $6 level in the first 10mins of the day, option volume in Bank of America is running 4x normal pace, with 170,000 contracts trading in the first 15mins of the day, and the short term weekly’s that expire this Friday leading the volume. Sentiment is mixed, with 7 strike calls leading the volume and a buyer paying 38cents for 5000 contracts when shares were near 6.02, while bearish flow is represented in the 6 puts, where buyers have been paying 41 to 47cents for several thousand contracts. 30day atm iv in BAC is now near 130%.
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.