Volatility has decreased, with the VIX Index closing at 16.35. Low volatility means cheaper options, making Bank of America (BAC) a good candidate for a Long Straddle trade. This strategy involves buying a call and put with the same expiration and strike price, expecting a big move in either direction.

To set up a Long Straddle on BAC, buy the $50-strike call and put with an April 17th expiry. The trade costs $533, which is the maximum loss. The maximum profit is unlimited, with breakeven prices at $44.67 and $55.33. Profits can be made with a smaller move if it happens early in the trade.

Implied volatility changes will impact the trade, so understanding volatility is crucial. Mitigate risk by setting a stop loss at 20% of capital at risk ($165) and a profit target of 40%. Position sizing is important to limit losses to 1-2% of total portfolio value. Options are risky, consult a financial advisor before investing.

Read more at Barchart: BAC Long Straddle Trade Idea