Most Active Options Update: Bank of America Corporation (BAC) and Citigroup Inc. (C)

Options traders have taken different sides on Bank of America Corp (BAC) and Citigroup Inc (C)

by Karee Venema

Published on Feb 17, 2015 at 1:13 PM
Updated on Apr 20, 2015 at 5:32 PM

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. Two names of notable interest are financial firms Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C).

Most Active Options Table

Put buying has been popular in BAC's options pits in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the equity's 10-day put/call volume ratio of 0.32 on this trio of exchanges ranks in the 92nd annual percentile, meaning puts have been bought to open over calls with more rapidity just 8% of the time within the past year.

Today, however, calls are the options of choice, and are outpacing puts by a more than 2-to-1 margin. Most active is BAC's March 17 call, which appears to be seeing a mix of buying and selling activity. Those initiating new long positions expect BAC to rally north of the strike by the close on Friday, March 20 -- when the contracts expire. Meanwhile, those establishing fresh short positions are betting on the $17 mark to serve as a short-term ceiling.

Technically speaking, BAC hasn't surmounted $17 -- which roughly coincides with the equity's 20-week moving average -- since mid-January. Meanwhile, although Bank of America Corp has been making strides in February -- up 8.8% month-to-date -- the equity is succumbing to broad-market headwinds today, and was last seen down 0.7% at $16.49.

Call buying has been preferred on C of late, as evidenced by the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.40, which ranks in the 64th percentile of its annual range. This call-skewed bias is echoed in the security's Schaeffer's put/call open interest ratio (SOIR) of 0.78, which ranks lower than 72% of similar readings taken in the past year. Simply stated, short-term speculators are more call-heavy than usual toward C.

In today's session, roughly two calls have crossed the tape for every put, with C's March 55 call garnering notable attention. It appears the majority of positions have been bought to open, as traders gamble on C toppling the $55 mark over the next five weeks -- a feat not accomplished since the last trading day of 2014.

In fact, C has struggled on the charts in 2015, down nearly 5% to trade at $51.58. Although the equity is higher this afternoon following reports of a new board member, the shares could encounter resistance at their 50-day moving average -- a trendline that has not been toppled on a closing basis since Jan. 2.

Daily Chart of C Since January 2015 With 50-Day Moving Average

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