Higher Interest Rates Lead Bank of America to Earnings Beat

Options volume is running at triple the intraday average

Digital Content Manager
Oct 17, 2022 at 10:46 AM
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Bank of America Corp (NYSE:BAC) announced third-quarter earnings of 81 cents per share this morning, beating analysts' expectations of 77 cents per share, as well as a revenue beat of $24.61 billion. The bank name benefitted from surging interest rates, which made up for its sluggish investment banking division. Quarterly profits also fell a smaller-than-expected 9%, as the company set aside funds to prepare a potential economic downturn.

At last check, BAC is up 6.7% at $33.82. The equity is trading at its highest level since Sept. 21, but overhead pressure remains at the 120-day moving average. Though this trendline capped rallies in both August and September, shares are eyeing their fourth-straight daily win today, and have added 11.7% quarter-to-date.

Options traders are already chiming in on the upbeat results. So far, 79,000 calls and 39,000 puts have already crossed the tape, or triple the volume that's typically seen at this point. The most popular is the October 35 call, followed by the 34 call in that same series, both of which expire at the close this Friday. 

This denotes a shift in sentiment, given the options pits have leaned bearish in the last 10 weeks. This is per the security's  50-day put/call volume ratio over at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 87% of annual readings.



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