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Option Brief: Bank of America Corp (NYSE:BAC) call volume is running at a 31% mark-up to the average intraday rate today, with 87,000 contracts already on the tape (compared to 25,000 puts). In fact, the four most active strikes are calls expiring in either the March or April series of options.
Assuming the top position is the March 17.50 call, where north of 18,000 contracts have been exchanged. Roughly three-fifths of that volume crossed at the ask price, suggesting a portion of the contracts were bought. Additionally, volume outstrips open interest at the strike, and the International Securities Exchange (ISE) confirms some buy-to-open activity.
By purchasing the contracts to open, this morning's traders are expressing confidence that BAC shares will muscle north of $17.50 by the closing bell this Friday, when the options expire. At last check, the stock was up 1.7% at $17.08, meaning it needs to advance just another 2.5% to bring the call into the money. Regardless of whether or not that happens, the most the speculators can lose is the initial cash outlay.
Technically speaking, Bank of America Corp (NYSE:BAC) topped $17.50 earlier this month, notching a multi-year high of $17.63 in the process. In fundamental news, the financial firm announced the hiring of Kevin McLoughlin to head its global insurance investment banking wing. The executive, who has more than 25 years of experience, most recently worked for BAC rival Citigroup Inc (NYSE:C).