Trade of the Day:
BAC May 15/12 bull risk reversal
A trader sold 10,000 BAC May 12 puts at .42 and bot 10,000 May 15 calls at .54 for a net debit of .12 or $120k. As you can see from the risk/reward graph above the trade breaks even at $15.12 and has unlimited upside. The downside risk is that the trader will be put into BAC at $12 if the stock is trading at or below $12 by May expiration. BAC recently bounced off of its rising 50dma @ 12.40ish this past Monday but is still below is 200dam @ 14ish. BAC closed at 13.6.