We bought two March 9 puts for 1.10 yesterday when the stock popped to a high seven cents above our 8.08 Hidden Pivot target. The fact that BAC finished slightly above the target is not encouraging, but we’ll stick with the 0.95 stop-loss on the puts nonetheless. Our goal if B of A now drops as we’d expected is to spread off our premium risk by shorting puts of a lower strike. For now, though, do nothing further. If the rally continues, the nearest minor Hidden Pivot with stopping power lies at 8.27. The puts might be trading for around 0.91 at that point, but there’s no reason for us to double down by getting in the path of a runaway freight train. _______ UPDATE (11:12 a.m. EST): DaBoyz opened the stock on a 19-cent gap, allowing their esteemed colleagues in the options pits to do likewise with puts. Ours fetched 0.87, giving us a loss on two contracts of $46 plus commissions. Their quasi-criminal work accomplished, DaBoyz have allowed BAC to detumesce, and the puts we’d held have move back up to 1.00. We won’t try to intercept the stock again — other, perhaps, than by camouflage — because its easy moves through distinct Hidden Pivots are warning that those who make their living manipulating this stock, and who presumably are distributing it heavily into this rally, have bigger plans.
