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Most Active Options Update: Bank of America Corp (BAC)

Both call and put players eye Bank of America Corp's $17 mark

by 1/31/2014 2:06 PM
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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is Bank of America Corp (NYSE:BAC).


Bank of America Corp is following in the bearish footsteps of the broader equities market, with the shares off 0.5% at last check to linger near $16.85. In the stock's options pits, the $17 mark is in focus -- and has seen action on both the call and the put side.

The most active position today is BAC's weekly 1/31 17-strike call, where 39,650 contracts have changed hands. Given the short shelf-life of these out-of-the-money calls (they expire at today's close), there appears to be a mix of buying and selling activity happening here. This is confirmed by data from the International Securities Exchange (ISE).

The second most active position is the stock's weekly 2/7 17-strike call, which has seen 25,100 contracts cross the tape -- mostly on the ask side. Implied volatility (IV) is on the upswing, indicating the initiation of a fresh batch of bullish bets. Delta for this further-dated call is docked at 0.39, suggesting a 39% chance of an in-the-money finish at next Friday's close.

Finally, the largest single trade in BAC's options pits today is a 7,500-block of February 17 puts, which traded shortly after noon on the NASDAQ OMX PHLX (PHLX). This transaction went off at the ask price of $0.44 per put, and IV rose 1.1 percentage points, pointing to buy-to-open activity. Breakeven (at expiration) for the bearish play is $16.56, or the strike price minus the premium paid.

On the fundamental front, a judge for the New York Supreme Court today ruled in favor of Bank of America Corp's (NYSE:BAC) $8.5 billion settlement to investors for its role in the mortgage-backed securities crisis. The deal had previously been opposed by insurance giant American International Group Inc (NYSE:AIG).


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