Bank of America Corp (NYSE:BAC) ended last year on a hot streak. Investors were jazzed about the prospects for additional rate hikes from the Federal Reserve and looming dividend increases. In fact, BAC stock bulls got pretty much everything they wanted. And yet, Bank of America has little to show for all its efforts.

Yes, BAC stock is up 12.5% year to date. But the stock is down roughly 2.5% from its March highs north of $25. What’s more, BofA shares have spent most of 2017 bouncing around between support at $22.50 and resistance at $25.

In short, BAC stock has seen plenty of price action, but has gone practically nowhere since March. Making matters worse for BAC bulls, the shares are now closing in on overbought territory as they once again approach resistance at $25.

Click to Enlarge Driving uncertainty in BAC stock are concerns that President Donald Trump’s policy goals for the financial sector are falling by the wayside. Enthusiasm was strong heading into 2017, but optimism has fallen sharply, leading to weak trading activity across Wall Street. In fact, breadth is breaking down quickly in the market, as fears of a potential market top rise.

Earlier this month, Bank of America warned that trading revenue in the third quarter would fall 20%. Weak trading activity is sure to have a negative impact on Bank of America’s quarterly earnings report next month on Oct 13.

Speaking of earnings, Bank of America is expected to post a profit of 47 cents per share, up from 41 cents per share in the same quarter last year. Revenue is expected to remain essentially flat at $22.07 billion.

But the warning signs are falling on deaf ears in the brokerage community. Specifically, Thomson/First Call data indicates that BAC stock has attracted 22 buy ratings, compared to just seven holds and one sell rating. Should Bank of America’s results or guidance come in below expectations, it could spark a round of downgrades from this bullish bunch.

Elsewhere, options traders are also optimistic when it comes to BAC stock. Currently, the October put/call open interest ratio rests at a bullish reading of 0.72, with calls outnumbering puts among those options most affected by Bank of America’s quarterly report.

Overall, October implieds are pricing in a potential post-earnings move of about 5% for BAC stock. This places the upper bound at $26.28, while the lower bound lies at $23.70. As I noted above, technical support doesn’t emerge until the $22.50 region, meaning BAC stock could fall much further than implieds are pricing in. Meanwhile, resistance remains firm at $25, and should once again cap BAC to the upside.

2 Trades for BAC Stock

Put Spread: With BAC stock nearing both technical resistance and overbought territory, the path of least resistance lies to the downside. Furthermore, third-quarter earnings are sure to be a sell signal for many of the weaker BofA hands.

As such, traders looking to position themselves ahead of BofA’s report might want to consider entering an Oct $23/$24 bear put spread. At last check, this spread was offered at 18 cents, or $18 per pair of contracts. Breakeven lies at $23.82, while a maximum profit of 82 cents, or $82 per pair of contracts — a potential 355% return — is possible if BAC stock closes at or below $23 when October options expire.

Call Sell: If you’re not comfortable betting directly against BAC stock, you might consider a more neutral position by entering an Oct $26.50 strike call sell position. Such a trade is especially useful if you already own BAC stock, as it allows you to offset some of your portfolio losses in the event of a selloff, but also allows you exposure to any upside up until the stock trades at or above $26.50.

At last check, this option was bid at 14 cents, or $14 per contract. A sold call allows you keep the premium as long as BAC stock closes below $26.50 at expiration.

On the downside, if BAC rallies above $26.50 prior to expiration, you could be forced to provide 100 shares at current market value for each call sold, which could be quite costly if you do not have enough stock on hand to cover the call.

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