Market News

July 23, 2013  Tue 8:53 AM CT

A bearish combination play tops this morning's option activity in Bank of America as it trades at highs.

optionMONSTER systems show that a trader bought 20,000 October 13 puts for the ask price of $0.14 and sole 20,000 October 17 calls for $0.11. Volume was multiples of the previous open interest at each strike, so this is a new spread.

While this could be an outright bet that BAC will drop, it is likely a collar trade to protect a long-stock position. That would cost just $0.03, but it does limit gains on the shares to $17. (See our Education section)

BAC is up fractionally to $14.97 after breaking through $15 earlier in the morning, its highest levels since March 2011. Share were down near $12 a month ago.

Barely 20 minutes in the session, more than 87,000 BAC options have already changed hands.
News Archives
OptionsHouse

Education & Strategy

Election Sector Rotation

Sector rotation is the process where mutual funds, portfolio managers, and investors in general, shift their investments from one sector of the economy to another.

More education articles »