Bank of America Corp BAC shares are trading higher by 6% to $44.85 this week following news of Donald Trump's victory in the 2024 U.S. presidential election. The stock has otherwise pulled back roughly 1.2% Thursday afternoon following the The Federal Reserve’s decision to lower interest rates by 0.25 percentage points.
Trump's win, coupled with a Republican-controlled Senate, has generated optimism among investors for policies that could benefit major banks and boost the financial sector broadly.
What To Know: Analysts expect that Trump's proposed tax cuts could lead to higher net profits for corporations, particularly large financial institutions, as they capitalize on lower tax rates. This potential increase in profitability has made Bank of America's stock more attractive to investors.
Trump's economic plan includes further relaxing financial regulations, following his previous efforts to ease provisions of the Dodd-Frank Act, which had imposed strict oversight on banks in the aftermath of the 2008 financial crisis.
If further deregulation efforts materialize, Bank of America and other large banks may see reduced compliance costs and greater operational flexibility, enabling them to expand their lending activities and profit margins.
Read Also: Fed Cuts Interest Rates To Lowest Since February 2023, Sticks To Data-Driven Path
What Else: Trump's plan to stimulate the economy through infrastructure spending could also increase demand for financing and investment services. As one of the largest U.S. banks, Bank of America stands to benefit from a stronger domestic economy, which could drive loan growth and improve credit conditions.
Furthermore, Trump's trade policies, while potentially inflationary, may encourage capital flows into the U.S. banking sector, as firms look for stable financing amid global market shifts.
How To Buy BAC Stock
By now you're likely curious about how to participate in the market for Bank of America – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of Bank of America, which is trading at $44.71 as of publishing time, $100 would buy you 2.24 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, BAC has a 52-week high of $45.55 and a 52-week low of $27.34.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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