$BAC bulls bank another winner

Bank of America (BAC) made another new multi-year high today, delivering more gains to bullish option traders.

On Dec. 2, Market Rebellion’s Unusual Activity Service detected the purchase of 6,200 Weekly $34.50 calls, expiring today, for $0.09 to $0.11 with shares at $33.56. Volume was well above the strike’s previous open interest of just 879 contracts, showing that this was a new position.

Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls have traded for as much as $0.47 so far today, more than 4 times their purchase prices. The stock rose 4.17% in the same time period, underscoring how options can far outperform their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion in as many weeks.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

BAC is currently lower on the session by 0.52% to $34.49 in afternoon trading, just below the bank’s new multi-year high of $34.96 made earlier this session.