Bank of America (BAC) is up 26 cents to $7.74 and the second best gainer among 29 Dow stocks trading higher (only HPQ is in the red) late Friday. Trading is active and approaching 120 million BAC shares after both JP Morgan and Wells Fargo rallied around earnings news Friday. BofA reports on the morning of July 18. Trading in the options on the bank is active and reflects the bullish underlying tone ahead of the news. 198,0000 calls and 50,000 puts traded on the bank so far. July 8 calls, which are 3.5 percent OTM and expiring just a few days after BofA reports earnings, are the most actives. 57,000 traded. January 10 and August 8 calls are the next most actives. The top trade is in the Jan 2014s, however, as a 15,000-lot of Jan14 $10 calls traded on BAC on the 92-cent bid and is possibly part of an over-write on the bank. Meanwhile, implied vols in the options on the stock eased 3.5 percent to 44, as investors breathe a bit easier following the rally in the financials today.
About the Author (Author Profile)
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.