Most Active Weekly Options: Bank of America Corp and JPMorgan Chase & Co.

Weekly options continue to be popular on Bank of America Corp (BAC) and JPMorgan Chase & Co. (JPM)

by Kirra Fedyszyn

Published on Jan 9, 2017 at 2:45 PM

The 20 stocks listed in the table below have attracted the highest 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 names of notable interest are banking stocks Bank of America Corp (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM). Here's a quick look at how options traders are lining up on BAC and JPM.

most active weekly options January 9

BAC is trading 0.3% lower today at $22.60, despite receiving a price-target hike to $27 from $24 at Goldman Sachs -- in eight-year-high territory. Weighing on the stock is a lawsuit filed by the Federal Deposit Insurance Corporation (FDIC) against the bank for its alleged refusal to pay $542 million in deposit insurance. After soaring in the weeks following the U.S. presidential election, and tagging a multi-year high in mid-December, the shares have been stalling out in the $23-$23.50 region. Still, the stock is poised atop support at the 30-day moving average, and both analysts and traders have been largely optimistic.

Beginning with the brokerage bunch, 14 out of 19 analysts rate BAC a "buy" or better, without a single "sell" in sight. Elsewhere, short interest has been dropping in recent weeks, and currently represents just 1.3% of the equity's available float. Notably, BAC sports a Schaeffer's put/call open interest ratio of 0.76 -- higher than 87% of the past year's readings. But this doesn't necessarily mean near-term speculators are bearish. In fact, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms BAC traders have sold to open 1.6 puts for each one they've bought over the last two weeks.

Drilling down, the weekly 1/13 25-strike call has seen more open interest added over the last two weeks than any other weekly option. Data from the major exchanges suggests much of the action was of the sell-to-open variety. Put simply, sellers of the call have been betting on the $25 level to continue to serve as a ceiling for Bank of America Corp through week's end, when the series expires. The company is also due to report earnings before the market open this Friday, Jan. 13.

Turning to JPM, which will also report earnings on Friday morning, the stock has told a similar story of late. The impressive Trump rally for financial stocks ushered JPM to a record high just south of $88 on the first trading day on 2017. And after a lower start today, the shares were last spotted up 0.7% at $86.74. Like its peer above, JPM this morning received a price-target increase at Goldman Sachs, to $89 from $82. But the security could stand to see much more upbeat attention from analysts, as over half still rate the shares a "hold" or "strong sell."

Looking to the options pits, JPM has witnessed more optimism of late. In fact, its 10-day call/put volume ratio at the ISE, CBOE, and PHLX ranks in the 80th percentile of its annual range, at 1.56. Meanwhile, the stock has also seen a distinct preference for put selling. JPM's SOIR is seated just 1 percentage point from an annual high, at a top-heavy 2.39. But data from the major exchanges shows more than 1.5 puts have been sold to open for each one bought in the last 10 days.

Speculators targeted the now-expired weekly 1/6 series over the past two weeks, based on JPMorgan Chase & Co options with the largest open interest added. The overhead $92 level was in focus, with the weekly 1/6 92-strike call and put taking the two top spots. In today's trading, the weekly 1/13 85-strike put is the most active weekly option -- but with fewer than 900 contracts on the tape.

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