Options Update: Bank of America (BAC) & Wachovia (WB)
Wachovia (WB)
WB volatility at 78 into Loss, Reserve build, Div cut & Write-downs
WB is recently trading at $24.95 in pre-open trading, below its close of $27.81. WB announced a $350 million loss for the first quarter, $2 billion in new write-downs, raising $7 billion in new capital and will reduce its dividend by 41%.
Morgan Keegan say's "Credit deterioration was worse than expected." WB May option implied volatility of 78 is above its 6-month average of 48 according to Track Data.
Bank of America-BAC
BAC May volatility Elevated at into EPS
BAC is scheduled to report Q1 EPS on April 21. BAC May option implied volatility of 49 is above its 6-month average of 38 according to Track Data, suggesting larger price movement.
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About Paul Foster
Paul Foster is a former member of the Chicago Board Options Exchange with 21-years of professional experience in the capital markets, investments, trading, corporate finance, arbitrage, options and mergers & acquisitions. His writing about the options market has appeared in a wide variety of publications.
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