BofA (BAC) loses 10 cents to $7.80 and July 8 calls on the bank are this morning’s most actively traded options contract. Volume is approaching 44,000 and the flow includes a multi-exchange sweep (buyer) of 8,933 contracts for 40 cents when the market was 38 to 40 cents and another sweep of 7,836 for 38 cents when the market was 37 to 38 cents. Data from ISE is hinting at closing buyers. The contract is 2.6 percent OTM with a .46 delta and expiring in 32 days. Open interest is 156K and the largest of the front-month contracts in BAC. Shares are down a bit today, but up 13.3 percent during the past two weeks. The heavy trading in July 8 calls indicates that some investors are bracing for BAC to move beyond $8 in the weeks ahead — a level not seen since May 3. Thirty-day ATM implied vols in BAC moved up 1.5 percent to 50. Earnings will be reported on the morning of July 18, which is the Wednesday before the options expiration. (Whatstrading.com Premium Alert Sample).
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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.