Bank of America Options Volume Pop as Company Predicts Rebound in Net Interest Income
$Bank of America (BAC.US)$ is seeing its heaviest options trading volume in more than a month Tuesday morning after the company forecast a rebound in net interest income in the fourth quarter and reported second quarter earnings that beat analysts' estimates.
Net interest income, a measure of what the bank earns on loans minus the interest it pays its depositors, is expected to rise to $14.5 billion in the fourth quarter, from $14.1 billion a year earlier, according to the company's earnings presentation slides. That comes after the second quarter figure dipped by about $400 million to $13.9 billion from a year earlier.
Net interest income, a measure of what the bank earns on loans minus the interest it pays its depositors, is expected to rise to $14.5 billion in the fourth quarter, from $14.1 billion a year earlier, according to the company's earnings presentation slides. That comes after the second quarter figure dipped by about $400 million to $13.9 billion from a year earlier.
As of 11:56 a.m. in New York Tuesday, more than 349,000 options changed hands, the most since June 6. That landed the stock in the fourth slot for the most-active stock options, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$, and $Apple (AAPL.US)$.
The most popular Bank of America contracts were call options that give the holders the right to buy the stock at $44 across 17 expiration dates stretching through Dec. 18, 2026.
The increasing demand for call options came as the stock climbed to $43.89, poised for its highest close since February 2022. Bank of America shares are catching up to the gains of its peers, with its biggest rival, $JPMorgan (JPM.US)$ already on a record-breaking rally.
While Bank of America's earnings per share slipped to 83 cents a share in the second quarter, from 88 cents a year earlier, that's still better than the 80 cents expected by analysts polled by Capital IQ. Revenue, net of interest expense, rose to $25.38 billion, from $24.2 billion a year earlier. That surpassed the average analyst estimate of $25.2 billion.
Inflows into the stock outpaced outflows by $100.8 million as of noon time. That added to its first monthly net inflow since January.
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Options trading entails significant risk and is not appropriate for all customers. It is important that investors readCharacteristics and Risks of Standardized Optionsbefore engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors readCharacteristics and Risks of Standardized Optionsbefore engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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