Tuesday’s Vital Data: Apple Inc. (AAPL), Home Depot Inc (HD) and Bank of America Corp (BAC)

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The major market indices edged higher Monday, with the S&P 500 adding 0.3% to hit yet another in a string of record highs. Wall Street continues to find hope in the potential for a delayed rate hike from the Federal Reserve. Options traders were a bit more cautious, with puts gaining a bit of favor to send the CBOE put/call volume ratio rebounding back to 0.66. The 10-day moving average also moved higher, arriving at 0.63 after hitting a multi-week low on Friday.

Apple Inc. (NASDAQ:AAPL) topped Monday’s list of most active options, with traders continuing to speculate on coming updates to the company’s MacBook Pro and iMac product lines. Elsewhere, Home Depot Inc (NYSE:HD) saw a spike in volume heading into the company’s first-quarter earnings report, while Bank of America Corp (NYSE:BAC) options were popular ahead of a decision on mortgage claims lawsuits.

Tuesday’s Vital Data: Apple Inc. (AAPL), Home Depot Inc (HD) and Bank of America Corp (BAC)

Apple Inc. (AAPL)

More speculation surrounded Apple on Monday, with reports surfacing that the company may reveal updates to its MacBook Pro and iMac lines as soon as this week. Rumors are forecasting that a new 27-inch iMac with 5K Retina display is ready to ship right away, while the 15-inch MacBook Pro will reported come with the Force Touch trackpad. Both devices are supposedly upgraded with Intel Corporation (NASDAQ:INTC) Broadwell processors.

Options activity has been sluggish for AAPL of late, though the stock still saw 961,230 contracts trade on Monday. Overall, 69% of yesterday’s activity traded as calls, maintaining the bullish theme in the options pits. Taking a closer look reveals that traders are expecting a bit of a showdown at the $130 strike this week. In fact, the weekly May 22 series $130 call sports open interest of 97,243 contracts, while open interest at the May $130 put totals 65,007 contracts.

AAPL stock eclipsed the $130 mark yesterday, and shares appear to be adding a cushion to this level in premarket trading, with AAPL up a half-percent in early trading.

Home Depot Inc (HD)

After the close last night, Home Depot reported better-than-expected first-quarter earnings, hinting that yesterday’s attention to call options may have been smart money.  The company posted earnings of $1.21 per share on revenue of $20.89 billion — both figures were above Wall Street’s forecasts. Home Depot also guided higher for the full year, forecasting sales growth of 4.2% to 4.8%, up from prior guidance of 3.5% to 4.7%.

Heading into the report, options traders pushed volume to a near-term high of 94,575 contracts. A bullish bias was evident in that 63% of yesterday’s activity traded as HD call options. Out-of-the-money calls were the most popular, lending credence to expectations for an earnings beat. Currently, peak weekly May 22 series call open interest lies at the overhead $116 strike, where 7,982 contracts currently reside. Also of note are the 6,648 call contracts open at the in-the-money May $115 strike.

In premarket trading, HD stock is up nearly 1%.

Bank of America Corp (BAC)

BofA stock rallied nearly 1% on Monday, as investors looked toward a decision on three mortgage claims lawsuits. After the close, U.S. District Judge Katherine Forrest dismissed the three lawsuits that claimed that BofA breached its duties as a trustee for residential mortgage-backed securities.

BAC stock option calls were popular ahead of the decision, with 68% of Monday’s volume of 182,825 contracts trading on the call side. Turning once again to weekly May 22 series options, BAC’s currently at-the-money $16.50 strike currently sports peak call open interest of 28,321 contracts, with the 16 strike a close second with 17,081 contracts. On the put side, the $16.50 strike is also tops with 12,675 contracts.

BAC stock is trading marginally higher in premarket trading, but call traders with May $16.50 strike positions are not out of the woods just yet — especially with BAC still struggling to put some distance between it and its 200-day moving average.

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/2015/05/tuesdays-vital-data-apple-inc-aapl-home-depot-inc-hd-bank-america-corp-bac-options/.

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