Most Active Weekly Options: Bank of America Corp and Citigroup Inc

Option traders have been buying calls on Bank of America Corp (NYSE:BAC) and selling puts on Citigroup Inc (NYSE:C)

by Karee Venema

Published on Feb 4, 2016 at 12:00 PM
Updated on Jun 24, 2020 at 10:16 AM

The 20 stocks listed in the table below have attracted the highest total weekly options volume during the past 10 trading days. Stocks 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 notable names are financial firms Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C).

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Call buyers have been increasing their presence in BAC's options pits of late. In the last two weeks, specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio has jumped to 5.60 from 2.37. What's more, the current ratio ranks in the 81st annual percentile, meaning calls have been bought to open at a faster-than-usual clip.

Today, call volume is running at two times what's typically seen at this point in the day, with a hefty portion of the volume centered at the January 2017 15 and 17 strikes. Trade-Alert speculates this could be a result of one speculator rolling down her long call position, as she lowers her bullish expectations for the stock.

Technically speaking, BAC has struggled in step with its sector peers. Since notching a five-year high of $18.48 last July, the shares have surrendered nearly 27%. In fact, the stock hit a two-year low of $12.52 yesterday, after J.P. Morgan Securities lowered its price target on BAC -- as well as fellow financial firm Wells Fargo & Co (NYSE:WFC).

The security is getting a reprieve today, up 2.6% at $13.38. However, considering Bank of America Corp's 14-day Relative Strength Index (RSI) started today at 30 -- in oversold territory -- a near-term bounce wasn't out of the question.

C has also had its fair share of technical troubles, shedding one-third of its value since its July 23 six-year high of $60.95. A price-target cut to $56 from $60 at J.P. Morgan Securities sent C tumbling to a two-year low yesterday, with the shares bottoming out at $38.04 in intraday action. Similar to BAC, though, the stock is bouncing today -- up 1.% at last check to $40.77.

In the options arena, short-term speculators are more put-heavy than usual, per BAC's Schaeffer's put/call open interest ratio (SOIR) of 0.89 -- in the 80th annual percentile. This metric measures both buy- and sell-to-open activity among the front three-months' series of options, though, and it appears put players have preferred the latter strategy in recent weeks. At the ISE, CBOE, and PHLX, for example, speculators have sold to open 1.91 puts for each one they've purchased.

Today, it looks as if one speculator sold to open a block of 2,000 weekly 2/5 38.50-strike puts for 8 cents apiece. If this is indeed the case, the goal is for Citigroup Inc to stay north of $38.50 through tomorrow's close, when the series expires. In this best-case scenario, the options will expire worthless, and the trader can pocket the initial premium collected.

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