Bank of America Corp ( BAC ) shares are trading higher by 2.57% to $40.64 Thursday morning. Major indexes and several bank stocks are higher after the Federal Reserve cut interest rates by 50 basis points.

Why This Matters: Bank of America ( BAC ), like other large banks, generates a significant portion of its income through its net interest margin, which is the difference between the interest it earns on loans and the interest it pays on deposits.

While a rate cut might initially lower the income from loans, lower rates can stimulate borrowing, potentially increasing loan demand. BofA could capitalize on this with higher volumes of loans, boosting overall interest income despite the lower rates.

As a major lender, BofA stands to benefit from increased loan origination, particularly in mortgage lending, personal loans and corporate financing. This could improve the company’s loan portfolio and revenue streams.

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What Else: With rate cuts, consumers may also be more inclined to refinance existing debt or take on new debt at favorable rates. BofA could see increased activity in its consumer banking division, including mortgages, auto loans and credit cards.

Increased consumer spending could also drive higher transaction volumes, which would benefit its wealth management and transaction services divisions.

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How To Buy BAC Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Bank of America’s case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, BAC has a 52-week high of $44.44 and a 52-week low of $24.96.