Bank Stock Boosted by Double Upgrade

Calls have been popular in the options pits

Deputy Editor
Mar 24, 2021 at 9:13 AM
facebook twitter linkedin


The shares of Bank of New York Mellon Corp (NYSE:BK) are up 1.8% in electronic trading this morning, after a double-upgrade from BofA Global Research to "buy" from "underperform." The firm also lifted its price target to $50 from $43, citing long-term growth expectations for earnings and revenue, and noting that the bank is well-positioned for rising interest rates.

After bouncing off the $39 region in late January, BK enjoyed a rally to a March 18 annual high of $47.76. Though the stock has been cooling off since that high, its on track to snap that three-day skid today, while its 30-day moving average has stepped up as support. Longer term, BK is up around 62% year-over-year. 

There is plenty of room for further upgrades amongst the brokerage bunch. Coming into today, five analysts carried a "strong buy" rating on BK, and seven a "hold" or worse.

Sentiment has been much more optimistic in the options pits, however. This is per Bank of New York Mellon stock's 50-day call/put volume ratio of 10.71 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 98% of readings from the past year, revealing long calls being picked up at a much faster-than-usual pace during this time. 

Speculating on BK's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 30% stands higher than just 10% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners