Bank of America Corp. (NYSE: BAC) has seen an absolute massive butterfly call spread for January 2011 as 50,000 January $20 and $40 calls are bought for $1.94, and 100,000 $30 calls are sold at $0.37, so a $1.20 debit, expecting shares to nearly double over the next year and volatility to come down a bit. Shares are struggling to get above the 50 day EMA here, but this trade is a big institution looking for financials to continue to flourish in a low interest rate environment. A trade of this magnitude is notable, and is also a bullish signal that a large institution is staying bullish the US markets.
For whatever it is worth, there were reports mid-week that billionaire hedge fund operator John Paulson had implied a $29.81 price target for Bank of America out in 2011.
Joe Kunkle, OptionsHawk.com
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