By Pete Najarian of OptionMonster
NEW YORK -- Bank of America (BAC) has been bullish, and the option activity was flowing again Tuesday.
Most of the recent trades have been shorter-term and closer to the stock price, looking for a quick pop. And that move came in a hurry, with BAC standing out as one of the strongest big financial names in the last week.
Tuesday's traders gave it more time, using upside options going all the way out to March. OptionMonster's tracking systems show that they bought 10,000 March 17 calls for 21 cents and sold a similar number of March 18s for 9 cents, letting them control a move between those two prices. The traders paid just 12 cents to open this $1-wide vertical spread, which would translate into profit of 733% if that level is reached.
The bank's stock rose 1.88% to $15.20 on Tuesday and is up 6% in the last week. Calls outpaced puts by about 385,000 to 91,000, and total option volume was more than triple its daily average for the last month.
Najarian owns BAC calls.