Nibbling on bank exposure.
music selection: “Octopus’s Garden” — The Beatles
With the economic recovery underway and banks unfairly punished, now is a good time to bet on bank stocks. I’m opening a bull call spread in Bank Of America (BAC) as it has lagged the S&P but is now making up ground.
I bought the 21AUG2020 expiry 27/28 strikes bull call spread for 60 cents a share (14 spreads). The trade will be in force for about 75 days and yields 67% (560 on 840 at risk), so long as my downside protection of 4.42% is not breached. That comes out to 785% on an annualized basis.
Devour your prey raptors!