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Wednesday’s Vital Data: Exxon Mobil, Bank of America and Disney

Tyler Craig

U.S. stock futures are trading higher this morning following the worst Christmas Eve trading session in history.

Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.73% and S&P 500 futures are higher by 0.86%. Nasdaq-100 futures have added 0.1.15%.

In the options pits, put volume spiked sharply during Monday’s holiday-shortened session. Specifically, about 12.6 million calls and 14.9 million puts changed hands on the session.

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Over at the CBOE, panic has been in the air. Following Friday’s surge to a two-year high of 1.13, the single-session equity put/call volume ratio fell back to 0.79 on Monday. Meanwhile, the 10-day moving average lifted to a new two-year high of its own at 0.81.

Here were the three stocks sitting atop the most-actives list. Exxon Mobil (NYSE:XOM) saw renewed options interest amid its price plunge to fresh eight-year lows. Bank of America (NYSE:BAC) fell amid continued economic weakness worries. Finally, Disney (NYSE:DIS) options were hot as it declined alongside the broad market.

Let’s take a closer look:

options trading list

Exxon Mobil (XOM)

Considering the crash in oil prices, Exxon Mobil shares had been holding up quite well. Until last week that is. The oil giant finally succumbed to gravity by breaking major long-term support. The pre-Christmas downdraft knocked XOM stock down to a new eight-year low at $65.51. And, like the rest of the market, extremely oversold levels beckon to dumpster divers.

Meanwhile, its dividend yield has been fattening and now stands at a juicy 5.01%. Compared to the Ten-year Treasury yield of 2.75% and the S&P 500’s yield of 2.45%, there’s no doubt income-seekers now have Exxon on their radar.

On the options trading front, call volume won the day despite the beatdown. Total activity swelled to 142% of the average daily volume, with 53,541 total contracts traded. Calls accounted for 61% to the day’s take.

The increased demand drove implied volatility higher on the day to 41% placing it at the 100th percentile of its one-year range. Premiums are pricing in daily moves of $1.68 or 2.6%

Bank of America (BAC)

The financial sector continues to suffer amid economic slowdown worries. Bank of America fell to a new 52-week low of $22.73 on Monday. With the slide, BAC stock’s peak-to-trough losses grew to 31% moving the large-cap deeper into bear country.

Its price chart remains ugly as sin. Admittedly, that’s not a differentiator given the destruction across the entire market. Nonetheless, its share price remains deeply submerged beneath falling moving averages and it is extremely oversold.

On the options trading front, traders came after calls with a vengeance. Activity jumped to 137% of the average daily volume, with 533,775 total contracts traded; 90% of the trading came from call options alone.

Implied volatility ramped on the day to 50%, placing it at the 100th percentile of its one-year range. Premiums are now pricing in daily moves of 72 cents or 3.2% for BAC stock.


Disney (DIS)

Before last week, Disney was one of the few large-caps left standing with a positive return for 2018. Unfortunately, it finally fell victim to the selling panic seizing the market this month. DIS stock dropped 10% over the past three trading sessions and is now down 6.7% year-to-date.

However, with multiple support levels looming close by ($97 area), a rebound could be in the cards. On the options trading front, puts outpaced calls on the session. Total activity added to 123% of the average daily volume, with 47,165 total contracts traded; 66% of the day’s take came from puts.

Implied volatility fell slightly on the day to 36%, placing it at the 94th percentile of its one-year range. Premiums are pricing in daily moves of $2.26 or 2.3% for DIS stock.

As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. Want insightful education on how to trade? Check out his trading blog, Tales of a Technician.

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