Wall Street is trending higher heading into the open this morning, as investors consider their options with stocks trading just shy of record highs. Traders will have a lot on their plate today, including weekly jobless claims, the April Philadelphia Federal Reserve manufacturing survey, the Chicago Fed March national activity index and a European Central Bank policy meeting.
At last check, U.S. stock futures on the Dow Jones Industrial Average were up 0.03%, while S&P 500 futures were higher by 0.05% and Nasdaq-100 futures had gained 0.02%.
Options volume ticked lower for the first time in a while on Wednesday, as traders paused to take stock amid a flurry of corporate earnings reports. On the day, the CBOE single-session equity put/call volume ratio rose to 0.68, pulling the 10-day moving average out of its week-long coma to tick higher to 0.68.
In equity options news, Bank of America Corp (NYSE:BAC) options volume spiked after Jim Cramer touted the shares in an interview on TheStreet. Meanwhile, Apple Inc. (NASDAQ:AAPL) saw call volume rebound on Wednesday despite the stock’s continued technical troubles. Finally, Exxon Mobil Corporation (NYSE:XOM) saw heavy put volume despite good news from its Julia Oil Fields operations.
Bank of America Corp (BAC)
Calls were hot and heavy on BAC stock yesterday, with these typically bullish bets accounting for 77% of the more than 1.1 million contracts changing hands. The stock added more than 3.3% on Wednesday, pushing BAC past more than 52,000 call contracts at the weekly April 22 series $14.50 strike.
The shares are set to rally past $15 today, if premarket trading carries over into the open. Currently, there are nearly 23,000 calls open at this strike in the April 22 series.
Helping to propel BAC stock higher were comments yesterday from analyst Jim Cramer. Cramer said that BAC has “deep value” when compared to other financial services firms, like Cowen Group Inc (NASDAQ:COWN) and Wells Fargo & Co (NYSE:WFC).
Apple Inc. (AAPL)
Apple stock has been in a funk for nearly the past year, and the stock’s lack of upside vigor is starting to worry many investors. Lack of innovation, slowing iPhone shipments, and smartphone market saturation have long been concerns, but Apple’s latest iPhone 7 news may be the nail in the coffin, as the company might be eschewing a major form factor update for incremental improvements.
However, any effect of all this on quarterly earnings will be known a day later than expected. Apple will report earnings on Tuesday, April 26, instead of Monday, April 25. Apple’s investor relations site says the delay is “out of respect for the friends and family of Bill Campbell, whose memorial service will be held Monday.”
AAPL options traders didn’t appear too concerned with the news or the stock’s continued weak price action. Volume came in north of 857,000 contracts yesterday, with 61% of those trading on the call side. AAPL is trading south of all major call and put open interest accumulations in the April 22 series, with the $107 strike currently the center of attention with roughly 10,000 contracts on either side of the put/call aisle.
Exxon Mobil Corporation (XOM)
XOM has been a hot stock in the options pits for the past several trading sessions, but yesterday saw the shares vault into the top five most active. Some 389,000 contracts crossed the tape on XOM yesterday, with puts dominating the landscape with 73% of the take.
The bearish activity took place despite news that Exxon was both ahead of schedule and under budget in starting up production at its Julia oil field in the Gulf of Mexico. Exxon already has the first well at this location up and running, with the second well slated to come online within the next couple of weeks.
Checking with short-term OI levels, XOM has rallied north of all major call and put accumulations in the April 22 series. Currently, traders remain focused on the April $86 and $86.50 call strikes, where roughly 5,000 contracts and 2,500 contracts are open, respectively.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
