Bank of America

B

Blue_Bull

I am (foolishly) holding a couple of OTM May calls for BAC. Hopefully the TARP repayment that was just announced drives the stock up in the next few months.

The way I see it, the good news is that they probably won't be raising capital (i.e. diluting equity) in the near future. Also, this might make is easier to find a new CEO.

The dividend, on the other hand, is probably not going up anytime soon.

What do you guys think about BAC?
 
trading 16.15 after hours. I think someone will retire on the 16 calls tomorrow. Hold at least till the close tomorrow or longer, this is bullish to me.
 
Quote from kinggyppo:

trading 16.15 after hours. I think someone will retire on the 16 calls tomorrow. Hold at least till the close tomorrow or longer, this is bullish to me.
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Yeah, except I got sucked into the 20 calls. It was slightly before earnings, the stock had been consolidating and the 50MA had crept up under it perfectly. I was expecting good earnings and a breakout to ~20.

Additionally, the open interest on the calls I bought went from like 3k to 12k in a day (if I remember correctly). Somehow I thought that massive call buying was confirmation of my view.

Any feedback on what I did wrong with that trade?
 
Quote from Blue_Bull:

Any feedback on what I did wrong with that trade?
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If it's a May call, I'm not at all sure you did anything wrong. Maybe my crystal ball is broken. What was the premium?
 
Quote from The Big D:

If it's a May call, I'm not at all sure you did anything wrong. Maybe my crystal ball is broken. What was the premium?
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Without looking at my account ... I think it was like $1.6-$1.70 if I remember correctly.
 
Quote from Blue_Bull:

Without looking at my account ... I think it was like $1.6-$1.70 if I remember correctly.
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I've seen way worse bets. While my best guess is that the macro situation won't help you much (or probably hurt you much), I think you articulated some good reasons this could still be a winner including TARP payoff, portfolio stabilization and increased income.

I'm hoping this position is sized such that it could expire worthless without major pain.
 
Quote from The Big D:

I've seen way worse bets. While my best guess is that the macro situation won't help you much (or probably hurt you much), I think you articulated some good reasons this could still be a winner including TARP payoff, portfolio stabilization and increased income.

I'm hoping this position is sized such that it could expire worthless without major pain.
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I'm not a full time trader by any means. The position size in this case isn't a terribly big deal to me, which is why I decided to roll the dice on the next six month rather than selling for a loss (lack of discipline?).

But still, every loss sucks, which is why I'm hoping to salvage something out of these calls. Losses seem to add up pretty quick, so another a couple more and I'll be kicking myself.
 
Hi Blue_Bull,
Bank of America serves clients in more than 150 countries and has a relationship with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. The company is a component of the Dow Jones Industrial Average and a member of the Federal Deposit Insurance Corporation (FDIC).[12]

At one point considered one of the winners and healthiest survivors of the 2007 credit crisis, plunged in market value due in part to massive losses caused by its purchase of Merrill Lynch. Its Q1 2009 profit was 4.2 billion with 3.7 billion having come from Merrill Lynch.[13] As of September 2009, the total value of B of A's Mortgage and Asset Backed Securities is one of the highest in the banking industry at $264 Billion.
 
Quote from gogoejoe:

Hi Blue_Bull,
Bank of America serves clients in more than 150 countries and has a relationship with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. The company is a component of the Dow Jones Industrial Average and a member of the Federal Deposit Insurance Corporation (FDIC).[12]

At one point considered one of the winners and healthiest survivors of the 2007 credit crisis, plunged in market value due in part to massive losses caused by its purchase of Merrill Lynch. Its Q1 2009 profit was 4.2 billion with 3.7 billion having come from Merrill Lynch.[13] As of September 2009, the total value of B of A's Mortgage and Asset Backed Securities is one of the highest in the banking industry at $264 Billion.
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exactly. it is the past u are talking about.
 
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