Bulls Make a Deposit in Bank Stocks

Bank vault door
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Options were bullish yesterday on the financials, which have been solid recently and were key to yesterday's broad market rally.

The paper was especially heavy in Bank of America, which rallied 3.97 percent to finish at $11 even. More than 680,000 contracts traded in shares of Bank of America, including 473,000 calls, according to OptionMonster's scanners.

The December and January contracts dominated the activity, led by the December 11s, which traded in large size for $0.05 to $0.11. These options expire at the end of this week, so traders are looking for the stock to keep moving in the near term.

Calls lock in the price where investors can buy stock, so the options can generate nice leverage if the bet is right. However, they can become worthless in a hurry if it's not.

Morgan Stanley also lit up our systems, with almost 52,000 contracts changing hands. January was the main target, so those options are definitely looking for a New Year's pop in the bank's shares. Morgan Stanley shares rose 2.66 percent to $18.53, while calls outnumbered puts by about 34,000 to 17,700.

—By CNBC Contributor Pete Najarian

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns BAC calls.