Trade Idea – Long Call ZEBRA on BAC

Disclaimer: The trades discussed in this blog reflect the author's personal strategies and decisions. These are not financial advice and should not be considered recommendations to buy, sell, or hold any financial instruments. The author is not a licensed financial advisor. Options trading carries significant risk, and readers should perform their own research or consult a qualified financial advisor before making any investment decisions. Past performance does not guarantee future results.

I have just opened a bullish position on Bank of America (BAC) using a long call ZEBRA, a “Zero Extrinsic Back Ratio” strategy designed to mimic long stock exposure while capping downside risk and minimizing capital outlay. I like the ZEBRA strategy because it offers nearly dollar-for-dollar upside participation beyond the long strike.

With BAC currently trading at $47.10, I'm bullish on the company after it delivered a solid earnings report just a few days ago. The market seemed to respond favorably, and with momentum building, I saw an opportunity to position with defined risk and attractive reward potential.

The Trade

All options are in the September 2025 expiration:

• Buy 2× 47.0 Calls
• Sell 1× 50.0 Call

This results in a net debit of approximately $2.88 per share, or $288 total. The trade is structured to keep delta high, theta low, and capital exposure minimal.

The P&L profile of my trade looks like this (I found this trade on our predefined scan for the Zebra strategy):

I highlighted a scenario on the chart where BAC moves toward the average analyst price target, specifically, to a level about 5% below it, which lands at approximately $50.39. In that case, the position would be showing a profit close to $400, which is a fantastic return for a trade that only risks less than $300.

Let me recap the key numbers of the trade:

• Max Risk: $288, which is my initial debit, and that’s it
• Breakeven: $48.45 at expiration
• Upside Potential: Unlimited beyond the $50 strike, minus the short call
• Downside Risk: Defined, capped at the initial cost
• Return on my target price: Around 130%

Why This Trade Made Sense

BAC’s chart has been firming up near key technical support around $47, and with recent earnings strength confirming the fundamental picture, the timing lined up well. Let me show you the price chart:

Also, implied volatility is low (IV rank below 10%, so I like the idea of buying 2 options vs selling 1), and that the company is undeniably solid.

The short 50 call reduces cost without overly capping upside, and with the stock trading just under that level, the payoff zone opens wide. Should BAC make a push toward analyst targets, I stand to profit meaningfully without the risks of owning shares outright.

This trade expires in September 2025, but I may not hold it that long. A lot will depend on how the price moves in the coming weeks.

As always, you can find this and all other trades in the public trade log for transparency.