Key financial names draw huge activity

The financials were a key factor in helping the S&P 500 hold onto its gains late yesterday, and some big names attracted extemely heavy option activity.

The stock and options volumes in Bank of America were extraordinarily large. Almost 600,000 contracts traded, more than double its daily average. The February 7, March 8, and January 7.50 calls all saw huge buying on optionMONSTER's Heat Seeker system.

These long calls lock the price that traders would need to pay for the stock, so they can deliver substantial leverage if the bank moves in the right direction. (See our Education section)

More than 400,000 calls traded compared with less than 200,000 puts, reflecting the bullish sentiment. BAC closed 5.74 percent higher at $6.63.

JP Morgan was also active, though its options were more evenly split between calls and puts. But it was curious to see the March 40 calls light up late in the day for $0.48 and $0.50. JPM shares also finished strong, rising 2.12 percent to $36.05.

Disclosure: I am long BAC and JPM calls.

(A version of this post appeared on InsideOptions Pro yesterday.)

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