Monday’s Vital Data: Facebook Inc (FB), Bank of America Corp (BAC) and Sunedison Inc (SUNE)

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The major market indices closed broadly lower on Friday, as July jobs data came in lower than expected, but strong enough to all but guarantee a Fed rate hike next month. As a result, the S&P 500 closed down for the week, shedding 0.29%. The broad-market index has now posted losses in five of the past seven weeks.

Option volume evaporated on Friday, as a slowing tide of corporate earnings reports led traders to retreat to the sidelines once again. What little volume there was on Friday trended toward cautious activity, as the CBOE’s single-session equity put/call volume ratio remained in one-week-high territory, arriving at 0.83. The 10-day moving average held at 0.71 for the third straight session.

In equity options activity, Facebook Inc (NASDAQ:FB) returned to favor among call traders as the company’s security chief announced plans to increase cybersecurity efforts. Elsewhere, Bank of America Corp (NYSE:BAC) reportedly plans to sell $1.2 billion in delinquent and nonperforming home loans, and Sunedison Inc (NYSE:SUNE) shares plunged after the company posted a wider-than-expected second-quarter loss.

08-10-2015 Top Ten Options

Facebook Inc (FB)

Speaking at the Def Con cybersecurity conference in Las Vegas, Facebook cybersecurity chief Alex Stamos pledged to increase defenses against cybercrime across the globe, placing an emphasis on developing countries. According to Stamos, online companies like Facebook can no longer rely solely on the cyber security industry to protect their users. As such, Stamos is pushing Facebook initiatives to protect its own users, and urged other online firms to follow suit.

Despite an overall decline in option activity, volume on FB stock options remained strong on Friday. Some 356,251 contracts crossed the tape on FB, with calls accounting for 65% of the day’s total.

The $95 strike remains a point of focus for FB traders, with 7,108 call contracts currently open at this strike in the weekly Aug 14 series. Peak put open interest for the series, however, lies at the overhead $96 strike, totaling 5,010 contracts.

With FB stock dipping below its 10- and 20-day moving averages in the $95 region on Friday, look for this area to receive increased attention throughout the week.

Bank of America Corp (BAC)

Call volume was also heavy on BAC stock on Friday. The company attracted total volume of 259,432 contracts, with call claiming 65% of the take for the day. The weekly Aug 14 series $17.50 and $18 strikes should be the most contentious this week. The $17.50 put is home to OI of 19,907 contracts, while the $18 call strike houses peak OI of 29,285 contracts.

Driving a bit of bullish activity at the end of last week, reports surfaced that BofA was selling $1.2 billion in mostly underperforming and delinquent home loans. The move is said to be taking advantage of increasing demand for soured loans by investment firms.

While BAC stock has been strong in the past month, the shares have traded in a tight range for the past week. As a result, BAC’s 10- and 20-day moving averages completed a bearish cross on Friday. With the stock perched between peak OI strikes in the weekly Aug 14 series, a breakout in either direction could be significant.

Sunedison Inc (SUNE)

SUNE stock rolled off a cliff last week, as investors expressed their displeasure with the company’s poor second-quarter earnings report. For the quarter, Sunedison posted a loss of 93 cents per share, considerably wider than the loss of 55 cents per share that analysts were looking for. The stock is now down more than 50% since hitting a peak of $33.45 on July 20.

Surprisingly, however, it appears that options traders may be looking for a rebound in SUNE stock. The shares saw heavy short-term volume of 206,802 contracts on Friday, with calls making up 71% of the day’s activity.

Looking at weekly Aug 14 series OI, peak open interest currently totals 3,401 contracts at the out-of-the-money $16 strike call. Another 1,024 and 1,109 contracts are open at the $17.50 and $18 calls in the August series, respectively. Peak put OI for the series, meanwhile, totals 2,015 contracts at the deep-in-the-money $19.50 strike.

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/2015/08/mondays-vital-data-facebook-inc-fb-bank-america-corp-bac-sunedison-inc-sune-options/.

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