Key Financials Draw Huge Options Action

By Pete Najarian, co-founder of OptionMonster.

NEW YORK (OptionMonster) -- The financials were a key factor in helping the S&P 500 hold onto its gains late Tuesday, and some big names attracted extremely heavy option activity.

The stock and options volumes in Bank of America (BAC) were extraordinarily large. Almost 600,000 contracts traded, more than double its daily average. The February 7, March 8, and January 7.50 calls all showed huge buying on OptionMonster's tracking systems.

These long calls lock the price that traders would need to pay for the stock, so they can deliver substantial leverage if the bank moves in the right direction.

More than 400,000 calls traded compared with less than 200,000 puts, reflecting the bullish sentiment. The stock closed 5.74% higher at $6.63.

JPMorgan(JPM) was also active, though its options were more evenly split between calls and puts. But it was curious to see the March 40 calls light up late in the day for 48 cents and 50 cents. The bank's shares also finished strong, rising 2.12% to $36.05.

Najarian is long BAC and JPM calls.

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