Bank of America Corporation (BAC) and the $2 Million Bullish Bet

Bank of America Corp (NYSE:BAC) is higher today amid a sector-wide rally, and call volume has picked up

Jun 5, 2015 at 2:41 PM
facebook X logo linkedin


Bank of America Corp (NYSE:BAC) is following its sector peers higher today, amid increased expectations for a June rate hike. At last check, the stock was up 2.5% at $17.20, and calls were flying off the shelves at a rate four times the intraday average -- and outpacing puts by a more than 5-to-1 margin.

Most active is BAC's November 18 call, where 123,744 contracts are on the tape -- making it the most active overall stock option traded thus far. According to Trade-Alert, one massive block of 35,000 contracts was bought to open for $2.1 million (number of contracts * $0.61 premium paid * 100 shares per contract). By purchasing new positions here, this speculator is hoping BAC topples breakeven at $18.61 (strike plus premium paid) by the time the options expire on Friday, Nov. 20. The stock has not seen the north side of this mark since April 2010.

Today's accelerated call activity marks a change of pace in BAC's options pits -- as evidenced by yesterday's intraday action. In fact, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.31 ranks in the 89th annual percentile. Simply stated, puts have been bought to open over calls at a near-annual-high clip in recent weeks.

Technically speaking, Bank of America Corp (NYSE:BAC) has been on the mend since hitting its most recent low of $15.25 on April 1, up 12.8%. However, the equity has not closed a session north of $18 since Dec. 30. Regardless of where BAC settles at November options expiration, though, the most today's call buyer stands to lose is the initial premium paid.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI