Upside option activity in Bank of America was on fire again yesterday.
The October 15 calls really stood out, with most of the large prints purchased for $0.50 to $0.65 as almost 12,000 contracts changed hands, according to OptionMonster's real-time tracking systems. There was also heavy buying in the Weekly 15 calls that expire next Friday, which saw more than 20,000 contracts go for $0.04 to $0.14.
These calls lock in the price where shares can be purchased no matter how far the stock might rise, potentially profiting from a move higher for much less cost than buying shares outright. The leverage can be extreme if traders time the rally correctly, but the contracts can end up worthless if the shares fail to gain enough by their expiration dates.