Options Traders Buy Calls on Amazon, Bank of America Stocks

Weekly options volume has been accelerated on Amazon and Bank of America stocks

Jun 5, 2017 at 11:47 AM
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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 FANG stock Amazon.com, Inc. (NASDAQ:AMZN) and financial firm Bank of America Corp (NYSE:BAC). Here's a quick look at how options traders have been trading shares of AMZN and BAC.

most active weekly options june 5

AMZN Options Trader Sees New Highs By Friday

Call buying has been popular on AMZN stock in recent weeks, as the shares climb past the $1,000 mark. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 125,618 calls have been bought to open on Amazon stock in the last 10 sessions, versus 112,871 puts. The resultant call/put volume ratio of 1.11 ranks in the 69th annual percentile, meaning long calls have been initiated relative to puts at a faster-than-usual clip.

Among options that have yet to expire, AMZN's weekly 6/9 1,020-strike call has seen a notable rise in open interest over this two-week time frame, with 2,971 contracts added. Part of this action was due to a 1,009-contract block that was seemingly bought to open last Friday for $353,150 (number of contracts * $3.50 premium paid * 100 shares per contract). If this is the case, the Amazon options trader expects the stock to be sitting north of $1,020 at this Friday's close, when the series expires.

At last check, AMZN stock was trading up 0.2% at $1,008.57, and earlier hit a record high of $1,009.50. The shares may be reacting to a report in Japan's Nikkei that Amazon could be a potential suitor for Toshiba's chip business -- and brushing off speculation that Apple is going to introduce an Echo rival at its WWDC. Regardless, Amazon stock boasts a 39% year-over-year lead -- and given its high share price, buying options may be a more approachable way to trade AMZN.

BAC Options Trader Bets On a Short-Term Bounce

Out of 481,876 weekly Bank of America options that have traded in the last two weeks, 315,813 have been calls compared to 166,063 puts. This skew toward calls is continuing today, with 53,581 BAC calls traded, versus 57,266 puts. Receiving notable attention is the stock's weekly 6/9 23-strike call, where it looks like one options trader may have possibly bought to open a block of 3,050 contracts for $0.08 apiece, or $24,400. In this case, the goal is for BAC shares to close north of $23 by week's end.

Most recently, BAC stock was seen trading up 0.7% at $22.61, after a Barron's write-up said the company is "finally showing signs of turning around," and "could thrive in an inflationary environment." And while Bank of America shares have struggled since topping out at a post-recession high of $25.80 in early March, they recently found a foothold atop their rising 160-day moving average.

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