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

Bank of America Corp option bulls bet on an extended rally

by Karee Venema

Published on Oct 22, 2014 at 10:49 AM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below are the S&P 500 Index (SPX) components that have attracted the highest weekly 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. One name of notable interest today is Bank of America Corp (NYSE:BAC), where option traders are eyeing a strong finish to the week.

Most Active Weekly Options Table

Since taking an earnings-induced stumble last week, shares of Bank of America Corp have bounced back nearly 8%. The stock is continuing this momentum today, up 0.2% to $16.64. However, this is not enough to satiate this morning's option bulls, who are eyeing more upside for the financial firm through week's end.

Taking a quick step back, calls are outpacing puts by a nearly 2-to-1 margin thus far, and based on BAC's 30-day at-the-money implied volatility (IV) -- which is up 1.6% at 20.1% -- short-term contracts are in high demand. Most active on the call side is the equity's weekly 10/24 17 strike, where 13,855 contracts have traded. Almost all of these calls have gone off at the ask price, and IV is higher, two indications of buy-to-open activity. This theory is echoed by Trade-Alert.

Amid today's positive price action, delta on the call has risen to 0.15 from 0.10, suggesting an increased probability the option will be in the money at this Friday's close, when the weekly series expires. Should Bank of America Corp (NYSE:BAC) fail to topple $17 by week's end, though, the most the call buyers stand to lose is the initial premium paid.


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