Bank of America, Ford Stocks See Heavy Options Trading

Bank of America and Ford Motor have seen some of the heaviest options volume in the past two weeks

Apr 3, 2017 at 12:29 PM
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The 20 stocks listed in the table below have attracted the highest total 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 bank stock Bank of America Corp (NYSE:BAC) and automaker Ford Motor Company (NYSE:F). Here's a quick look at how options traders have been placing bets on BAC and F shares.

most active stock options april 3

Options Traders Bet On More Losses for Bank of America Stock

Put buying has been picking up speed on BAC stock, as optimism toward the Trump trade fades. While the now-expired weekly 3/31 24-strike call has seen the biggest rise in open interest over the past two weeks -- when more than 101,383 contracts were added -- today's options traders are setting their sights on puts in the front-month April series.

Roughly 100,000 BAC puts have changed hands so far -- 1.4 times what's typically seen at this point in the session. The bulk of this activity has centered at the April 21.50 put, due to a 13,224-contract sweep that appears to have been bought to open for $158,688 (number of contracts * $0.12 premium paid * 100 shares per contract). This is the most the put buyers stands to lose, should BAC settle north of the strike at the close on Friday, April 21 -- when the options expire. Profit, meanwhile, will accumulate on a move south of breakeven at $21.38 (strike less premium paid).

At last check, the shares of Bank of America Corp were down 1.6% at $23.21, even after Jefferies raised its price target on the stock to $28 from $24 -- territory not charted since October 2008. This just highlights the bank stock's recent technical troubles, with BAC down 10% from its early March multi-year peak of $25.80, and trading below its formerly supportive 50-day moving average.

Call Buyers Keep the Faith as Ford Motor Stock Sells Off

In the past 10 trading sessions, 333,037 calls options have changed hands on F stock, compared to 233,255 put options. A healthy part of this action has been at the hands of call buyers, per the stock's 10-day call/put volume ratio of 2.37 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- in the elevated 81st annual percentile. 

The stock's September 13 call has seen the biggest rise in open interest over the past two weeks, with more than 53,500 contracts added. This strike is now one of F's top open interest positions, with 116,829 contracts outstanding. Data confirms massive buy-to-open activity here, meaning call buyers are betting on Ford stock to surge back above $13 by September options expiration.

Ford shares are getting smacked this afternoon, though, down 2.8% at $11.31. Weighing on F stock is news the company has recalled 52,600 F-250 pickup trucks, as well as 7% drop in vehicle sales last month. Pouring salt on the proverbial wound is a report that Tesla Inc (NASDAQ:TSLA) has surpassed Ford Motor Company in terms of market cap. Today's decline has Ford Motor stock off almost 15% from its early January year-to-date high of $13.27, and on track for its lowest close since Feb. 11, 2016.

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