Is a Bottom Near for This Major Banking Stock?
Insiders may be signaling a bottom for Bank of America.
In the midst of a major market sell-off – where the Dow Jones Industrial Average was down 475 points (and taking everything down with it) – there was some call buying in Bank of America (NYSE: BAC) that might indicate someone believes the bottom is in.
First, 5,500 Bank of America January 28, 2019, calls were bought at the asking price of $0.91. Then, another 1,000 Bank of America January 30 calls were bought at the asking price of $0.20. Although the call prices may appear small, that’s still more than $500,000 that’s saying Bank of America will move $4 higher by the third week of January. It didn’t take long for these calls to start moving in the buyer’s direction.
By the end of the day, the Dow had staged a major recovery – and Bank of America had bounced nearly $1 off the intraday lows. The January 30 calls ticked up to $0.37 and the January 28 calls traded for $0.99.
Is there more Bank of America bounce to come? After all, with a January expiration date, there’s plenty of time for a continued recovery to play out. So far, whoever called the bottom was spot on.