Monday’s Vital Data: Tesla Motors Inc (TSLA), Bank of America Corp (BAC) and Intel Corporation (INTC)

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With last week’s heavy losses, the major market indices have now lost ground in four of the past five weeks. The Dow Jones Industrial Average, Nasdaq and the S&P 500 index all shed more than 2% last week, practically erasing the gains from the week prior. The wealth of red had options traders capitulating to the trend, with the CBOE put/call volume ratio dropping to within reach of a monthly low at 0.79.

Digging into the most active options activity, flagging confidence for Tesla Motors Inc (NASDAQ:TSLA) was painted all over the stock’s options activity on Friday, while blue chips Bank of America Corp (NYSE:BAC) and Intel Corporation (NASDAQ:INTC) were favorite among call traders at the end of last week.

Monday’s Vital Data: Tesla Motors Inc (TSLA), Bank of America Corp (BAC) and Intel Corporation (INTC)

Tesla Motors Inc (TSLA)

Tesla Motors investors have had a rough year so far, with the stock shedding some 37% from its near-term high of $291 in the middle of last year. While there were a plethora a of minor headlines that continue to contribute to TSLA stock’s decline, news that Chinese Model S ownership registrations plunged 45% in February was a real smack in the face to investors. China is currently the largest automobile market in the world, and news that Tesla is faltering in this key market was not welcome.

The stock shed nearly 3% on the news, and options traders were more than happy to chase the falling star. Overall, 55% of the 223,299 contracts trading on TSLA stock changed hands on the put side. Among weekly options, peak put open interest in the April 2 series rests at the currently at-the-money 185 strike, totaling 1,990 contracts. Another 1,794 put contracts are open at the April 180 strike, with the 177.50 strike also popular with 1,610put contracts in residence.

In premarket trading, TSLA shares are trading fractionally higher as the shares look to hold support at $185.

Bank of America Corp (BAC)

Much has been made of the SEC’s decision to allow a shareholder vote on breaking up blue-chip banking giant Bank of America. Until recently, however, the analyst community has been very noncommittal. Mike Mayo, leading analyst for Hong Kong-based CLSA, broke that standoff over the weekend advocating for a split between the investment banking and retain operations.  According to Mayo, the divisions could gain as much as 25% following a split.

BAC investors could use some good news, as the shares are off more than 15% since the start of 2015. Options traders continue to appear hopeful for a rebound, with calls maintaining popularity on the stock. On Friday, BAC stock saw total options volume of 221,553 contracts, with 71.5% of that volume trading on the call side.

Despite the overall call bias, short-term weekly April 2 series open interest is skewed toward puts. Peak put open interest currently totals 41,142 contracts at the out-of-the-money $14.50 strike, compared to peak call open interest of just 20,585 contracts at the overhead $16.50 strike.

Intel Corporation (INTC)

Given the struggles within the semiconductor sector during the past several weeks, the 6.38% spike in Intel shares on Friday was a bit of a welcome shocker for INTC investors. According to a Wall Street Journal blog post, Intel is in advanced talks to acquire Altera Corporation (NASDAQ:ALTR) — a move that could be Intel’s largest acquisition ever.

The news brought additional attention to INTC stock calls, which have gained in popularity relative to puts during the past month. In fact, the April/May put/call open interest ratio for INTC has fallen from a reading north of 1.10 in mid-February to its current perch near 0.87. This trend appeared to continue on Friday, with 73% of the 215,182 contracts trading on the shares crossing on the call side.

INTC stock is giving back some of Friday’s gains in premarket trading, however, with shares down more than 1% at last check.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/03/mondays-vital-data-tesla-motors-inc-tsla-bank-of-america-corp-bac-and-intel-corporation-intc-options/.

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