Bank of America's Share Slump Spurs Demand for $34 Puts

About 14,890 put options that give the holder the right to sell Bank of America at $34 each by the end of this week were traded around noontime in New York. That's the biggest volume since trading activity of those puts started to pick up in early December, according to data compiled by moomoo. The contract is the most active by volume of all options tied to the stock.

Shares of the bank tumbled 4.5% after the company reported an 18% drop in profit in the first quarter as net interest income declined, with higher deposit costs more than offsetting higher asset yields and modest loan growth. During Bank of America's earnings call with analysts, Chief Financial Officer Alastair Borthwick said net interest income could bottom in the second quarter, before growing in the back half of 2024, Yahoo Finance reported.

Demand for the $34 puts have risen, sending the price of the option soaring almost 55% amid the stock sell-off. Holders are also abandoning call options that give them the right to buy Bank of America's stock at $35 by the end of the week, spurring almost a 10-fold jump in volume to 14,270 contracts, from 1,450 just a day earlier.

After the sell-off, more than half of the technical indicators tracked by moomoo are now leaning bullish, signaling that the stock may be oversold and could be poised for a reversal.