Monday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Alibaba Group Holding Ltd (BABA)

U.S. stock futures are trading flat to lower heading into the open this morning. Futures on the Nasdaq Composite are flat, while the Dow Jones Industrial Average and the S&P 500 Index are trading lower by roughly 0.2% at last check. Hopes for another reprieve from a Fed rate hike in December evaporated on Friday after October nonfarm payrolls came in well above expectations. Odds for a December hike now stand at about 70%.

Option volume remained above average on Thursday, with weekly November 6 series expiration and arbitrage activity from General Electric Company (NYSE:GE) traders providing drivers. Overall, calls remained dominant on the CBOE, with the single-session equity put/call volume ratio rising slightly to 0.66. The 10-day moving average, however, may be signaling a short-term reversal toward puts, bouncing off Thursday’s four-month low to come in at 0.65.

On the equity options front, call volume surged on Bank of America Corp (NYSE:BAC) following a trio of bullish headlines, including increased odds of a December Fed rate hike. Elsewhere, Apple Inc. (NASDAQ:AAPL) options traders got the ball rolling once again after September smartphone market share data hit the Street. Finally, Alibaba Group Holding Ltd (NYSE:BABA) attracted a wealth of call activity after announcing it was purchasing Youku Tudou Inc (ADR) (NYSE:YOKU) for $3.7 billion.

Monday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Alibaba Group Holding Ltd (BABA)

Bank of America Corp. (BAC)

BAC stock jumped nearly 3.7% on Friday as investors flocked to the banking giant following increased odds of a Federal Reserve interest rate hike in December — a move that would increase revenue for BofA’s lending and investment banking operations. Additionally, the company also announced that it was selling its money market fund (with $87 billion in assets) to BlackRock, Inc. (NYSE:BLK) as well as launching a new automated investment service for Merrill Lynch targeting accounts under $250,000.

Option volume for BAC dipped from activity earlier in the week, but remained well above average for the banking behemoth. Nearly 1 million contracts traded on BAC, with calls accounting for a whopping 81% of the day’s take. Looking at weekly Nov 11 series open interest, traders are heading into this week focused heavily on the $18 strike call, with 25,284 contracts, and the $17 strike put, with 31,823 contracts. Given this OI configuration, BAC could well remain range-bound for the week barring any major developments.

Apple Inc. (AAPL)

It’s unusual for AAPL option activity to take a backseat to one stock in terms of volume, let alone multiple. But the stock arrived in third-place on Friday, attracting a below average 666,160 contracts in total volume. Call traders continued apace for AAPL, with these typically bullish contracts accounting for 61% of the day’s take.  

Driving volume on Friday was a report that Apple’s smartphone market share once again blew away its closest competitor, with Apple raking in 43.6% of the market in September versus Samsung’s (OTCMKTS:SSNLF) 27.6% share. That said, Apple still takes a backseat to Alphabet Inc.s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Android operating system, with iOS commanding a market shares of 43.6% versus Android’s 52.3% stranglehold.  

Heading into this week, AAPL options traders are extremely call heavy in terms of OI.  In fact, the weekly Nov 13 series $121, $122 and $123 strikes all sport OI in excess of 12,400 contracts. Furthermore, another 15,875 contracts are open at the out-of-the-money $125 strike. This heavy overhead OI could limit AAPL’s upside this week, despite the shares finally eclipsing resistance at $120 on Friday.

Alibaba Group Holding Ltd (BABA)

BABA shares dipped more than 2% on Friday following news that the company was shelling out $3.7 billion for Youku Tudou Inc, a.k.a “China’s YouTube.” As a result, Alibaba will have access to more than half a billion online video users, solidifying the company’s lead in the Chinese online market.

Despite BABA’s dip on Friday, options traders remained largely positive. Total volume came in at 368,917 contracts, with calls accounting for 62% of the day’s total. Heading into the week, weekly Nov 13 series OI is currently focused on the overhead $84 strike, with 3,384 contracts, and the $88 strike, where 3,782 contracts reside. Peak put OI, meanwhile totals 3,984 contracts at the $80 strike.

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

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