Bullish Trading Strikes Bank of America Options
BofA (BAC) is up 9 cents to $8 and is one of 30 Dow stocks holding gains after Fed Chairman Bernanke’s speech in Jackson Hole, WY included soothing words about additional policy easing if necessary. BAC is up on the day and Oct 9 calls on the bank are today’s most actively traded equity options contract. More than 53,000 traded, including a buyer of 25,000 contracts for 11 cents on AMEX. A separate block of 24,300 recently traded for 12 cents on PHLX. Oct 9 calls on BofA are now $1, or 12.5 percent, out-of-the-money, with a .21 delta. There’s 60,224 in existing open interest and the contract expires in 7 weeks.
The stock recorded a 52-week high of $10.1 in mid-March, before trending lower through mid-May — then chopping around in a range since that time. BAC had suffered a six-day 3.8 percent slide heading into Bernanke’s speech, but held its 50-day moving average and is ticking higher in active trading of 45 million shares today. Meanwhile, 30-day ATM implied volatility in the options on the banking giant has eased 1.5 percent to 33 today and remains at the lower end (5th percentile) of the 52-week range, which is 28.5 (8/15) and 56 (6/11).
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Fred Ruffy
WhatsTrading.com
Category: All Stocks, Banks, Large Cap Stocks
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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.
