Bank of America Stock Falls Ahead of Earnings

Bank of America tends to do poorly the day after earnings

Deputy Editor
Jan 18, 2022 at 1:41 PM
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With fourth-quarter earnings due out before the open tomorrow, Jan. 19, the shares of Bank of America Corp (NYSE:BAC) are falling, down 3.3% at $46.36 this afternoon. Looking back, the stock has seen overwhelmingly negative post-earnings returns during the past two years.

In fact, seven out of eight of these next-day sessions saw Bank of America stock move lower, averaging a 3.4% swing, regardless of direction. This time around, the options pits are pricing in a slightly bigger 4.7% move for BAC.  

On the charts, the equity pulled back from a Jan. 10 15-year high of $50.08 in recent sessions. Bank of America stock has safety nets in place from the $46 level, as well as the formerly resistant 50-day moving average, and remains up 40.6% year-over-year.

BAC Chart 2 Jan 18

BAC's options pits are filled with pessimism at the moment. The equity sports a Schaeffer's put/call open interest ratio (SOIR) of 1.27, which stands higher than 100% of readings from the past year. In other words, short-term options traders have had a bigger appetite for puts than usual. 

It is also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at 95 out of 100. This suggests Bank of America stock has exceeded options traders' volatility expectations during the past year.


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