BAC - Open Position

Written on February 6, 2009 – 6:03 pm | by admin

While I have been trying to stay away from the banks, I decided that I would initiate a position in Bank of America today.  Over the past 2 days, it has plummeted to a low of 3.77 on tremendous volume.  With the news about BAC maybe being “forced” to buy Merrill Lynch and the fact that the government has already put up huge numbers to back the bank, I feel that the chance of them going to zero is small.  This position may go from a small gain into a position that I hold for a few months if government policy starts to turn positive for the banks.

Buy: 200 @ $6.00 ($7 commission)
Initial Investment: $1207.00
Sold: $4 strike @ $2.28 ( $9.51 commission)
Net Investment: $760.51
Expected Return: 3.02% (42.98% annually)


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