Friday, August 17, 2012

Aqumin Volatility Newsletter 08/17/2012 - $BAC

Unusual Activity

Today has been a relatively slow day. Quiet, and for the most part the market can’t get behind much except for AAPL which is making new highs. I think with most of the name volatility making year lows and the indexes getting close, it is best to look at what is drawing the market’s attention. The surprise of the day is in finance.

Look at the Relative Volume numbers for Bank of America (BAC) on the OptionVision™ landscape below. The tall buildings just give a graphical representation of how busy the options were relative to normal activity. I actually had this on my radar earlier in the week because the IV had gotten so cheap and the story on BAC is still pretty mixed. Large paper came into the name today and bought calls and sold puts. That was enough to light up some buying as BAC broke through $8 for the first time since July. BAC has yet to make it past $8.25 since the spring. It looks like some paper is betting big that it might happen again.

Buying October volatility in BAC looks very good to me.

8-17-2012 1-39-11 PM

OptionVision™ – data from ORATS

Read more from Andrew at Option Pit

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