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

BAC bulls see new highs on the horizon

by 11/22/2013 2:08 PM
Stocks quoted in this article:

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. Three names of notable interest this afternoon are Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), and Ford Motor Company (NYSE:F).

Put volume is accelerated on JPMorgan Chase & Co., despite the stock tagging a 12-year high earlier. It appears that a number of these positions are being used to initiate put spreads in the January 2014 and 2015 series of options. Put volume is also up on Ford Motor Company this afternoon. The September 2014 13-strike put is active, and per Trade-Alert, is being bought to open. Elsewhere, here's a closer look at how Bank of America Corp speculators are setting up their near-term bullish bets.


Bank of America Corp has made a string of higher highs recently, and today's price action is no different. In mid-morning action, the stock hit the $15.79 mark -- its loftiest perch since June 2010. At last check, though, BAC was seen lingering near $15.73. Not surprisingly, call volume has soared to two times the average intraday pace, and a number of traders are eyeing a deeper trek into multi-year-high territory over the next week.

Of the 30,810 weekly 11/29 16-strike calls that have crossed the tape thus far, 71% have done so on the ask side. Implied volatility is slightly higher, and volume is easily outstripping open interest, pointing to buy-to-open activity. Considering Bank of America Corp (NYSE:BAC) has not traded north of $16 in more than three years, delta for the call is docked at 0.22, or 22%, suggesting a less than 1-in-4 chance of an in-the-money finish. Should BAC fail to topple the strike price by expiration, the most the traders have risked is the initial premium paid. According to Trade-Alert, the volume-weighted average price for the calls is a modest $0.09 apiece.


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