The top equity options trade Monday is in BofA (BAC) after 50,000 May 7 puts were bought on the bank for 10 cents per contract. BAC is down 19 cents to $8.17 today on 229 million shares, which is typical volume for the bank, and is one of 27 Dow stocks set to finish with losses today. Options volume is a bit lighter than usual, with 244K calls and 191K puts traded so far. Beyond the big block of 50K May 7 puts, the next biggest trades are part of a Jun 7 – 8 – 9 put butterfly spread, which was sold at 29 cents, 6600X on ISE. ISEE confirm that 13200 Jun 8 puts were bought for the body of the fly and the position seems to reflect the view the stock will recapture $9 by the June expiration (or fall below $7). BAC touched the $10 level several times in March, but is down nearly 19 percent since that time and came under pressure last week when earnings were reported.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.