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Friday’s Vital Data: General Electric Company (GE), Amazon.com, Inc. (AMZN) and Bank of America Corp (BAC)

U.S. stock futures are mixed this morning. Wall Street is digesting another round of corporate earnings ahead of a potentially volatile political weekend.

stock market today
stock market today

Specifically, General Electric Company (NYSE:GE) is lifting the Dow Jones Industrial Average after beating first-quarter earnings estimates. However, the political scene could heat up significantly. The Department of Justice turned over ex-FBI director James Comey’s memos detailing his conversations with President Donald Trump. Tweets are already flying this morning.

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Against this backdrop, Dow futures are down 0.06%, S&P 500 futures are up 0.03% and Nasdaq-100 futures are down 0.18%.

Turning to the options pits, volume was robust on Thursday. About 20.2 million calls and 18.1 million puts changed hands on the session. The CBOE single-session equity put/call volume ratio rebounded to 0.64. The 10-day moving average held at 0.64.

Taking a closer look at Thursday’s options activity, General Electric saw a run on call options heading into this morning’s quarterly report. With GE stock up nearly 5% premarket, this appears to be smart money.

Elsewhere, Amazon.com, Inc. (NASDAQ:AMZN) was also call heavy after announcing it had 100 million Prime subscribers. Amazon reports earnings next week. Finally, someone is betting big on a Bank of America Corp (NYSE:BAC) stock rally using May options.

Friday’s Vital Options Data: General Electric Company (GE), Amazon.com, Inc. (AMZN) and Bank of America Corporation (BAC)
Friday’s Vital Options Data: General Electric Company (GE), Amazon.com, Inc. (AMZN) and Bank of America Corporation (BAC)

General Electric Company (GE)

GE shares are off and running this morning. The company posted adjusted first-quarter earnings of 16 cents per share, up from 14 cents a year ago. Analysts were expecting a profit of 11 cents per share. Revenue rose 7% to $28.66 billion, including a lift from the merger of its Oil & Gas business with Baker Hughes last year.

GE stock options traders loaded up on calls ahead of the event. Volume soared to 446,000 contracts, nearly doubling GE’s daily average. Calls made up 63% of the day’s take.

GE is set to open just shy of $15 this morning, putting the stock north of all major call open interest strikes in the May and June series. However, peak April call OI rests at the $15 strike, and could create some turbulence today.

Finally, if you got into either of the GE options trades I suggested on Tuesday, you should be sitting on a nice profit right about now.

Amazon.com, Inc. (AMZN)

Amazon Prime subscribers now total roughly 100 million. The company offered up the first official look as Prime membership totals, and it has analysts and options traders buzzing. The 100 million subs compares favorably with Netflix, Inc.’s (NASDAQ:NFLX) reported 125 million subscribers — but it’s important to remember that Prime includes much more than just Prime TV streaming.

Meanwhile, Amazon will report earnings next week after the close on Thursday. Analysts expect earnings of $1.26 per share, down from $1.48 per share last year. However, EarningsWhispers.com puts the whisper number at $1.32 per share.

AMZN stock options traders responded to the subscriber figure with call options. Volume rose to 250,000 contracts, with calls making up 62% of the day’s take. That said, the weekly April 27 put/call OI ratio still rests at a middling 0.78, with calls only just outnumbering puts for the series. April 27 implieds are pricing in a 6.7% move for AMZN stock following earnings.

Bank of America Corporation (BAC)

Bank of America stock certainly looks like a buy following it’s recent quarterly earnings report. The shares rallied more than 2% yesterday, reclaiming former support at $30 in the process. But options traders may have higher aspirations for BofA stock.

Yesterday, volume leapt to 508,000 contracts, outstripping BAC’s daily average. Calls were kings, claiming a whopping 82% of the day’s take. A large chunk of that call volume was tied up in a pair of rather bullish BAC trades, according to data from Trade-Alert.com.

The first was a block of 38,500 May $35 calls, which traded at the ask price of just 2 cents, or $2 per contract. Breakeven on this trade lies at $35.02, but would require a more than 16% move in BAC stock to hit.

The second was a spread trade centered on the weekly April 27 $31 call and the January 2019 $42 call. Two blocks of roughly 29,000 contracts reportedly traded at their respective ask prices. Given the spread and the difference in months, this appears to be a calendar spread trade on BAC stock.

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

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