OptionsHouse

Options Trading News

July 19, 2013  Fri 5:16 AM CT

BAC: SEE CHART GET CHAIN FIND STRATEGIES
Upside option activity in Bank of America was on fire again yesterday.

The October 15 calls really stood out, with most of the large prints purchased for $0.50 to $0.65 as almost  12,000 contracts changed hands, according to optionMONSTER's Heat Seeker real-time tracking system. There was also heavy buying in the Weekly 15 calls that expire next Friday, which saw more than 20,000 contracts go for $0.04 to $0.14.

These long calls lock in the price where shares can be purchased no matter how far the stock might rise, potentially profiting from a move higher for much less cost than buying shares outright. The leverage can be extreme if traders time the rally correctly, but the contracts will expire worthless if the stock fails to gain enough before they expire. (See our Education section)

BAC rose 3.14 percent to $14.76 yesterday, closing near the peaks of the session. Boosted by a strong earnings report earlier in the week, the stock is now back to its highest levels since early 2011.

Total option volume in the name reached 885,400 yesterday, 4 times its daily average, with 711,000 calls versus 174,000 puts. More than 1 million contracts turned over in the previous session.

Disclosure:
I own BAC calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


Related Stories

BAC

Bulls like Bank of America before report

July 12, 2016

The financial behemoth, which has fallen 9 percent in the last month, is scheduled to announce quarterly results before the market opens next Monday, July 18.

BAC

Limited upside seen in Bank Of America

June 28, 2016

The financial giant, which is down 17 percent in the last month, is scheduled to report earnings before the market opens on July 18.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Keep it simple

One of the appealing features about options trading is that different options can be combined to create a large variety of risk vs. reward profiles.

View more education articles »