Posts Tagged ‘ACI’

Thumbs-Up From Romney Sparks Bullish Activity In Arch Coal Calls

 

Today’s tickers: ACI & NFLX

ACI - Arch Coal, Inc. – Shares in Arch Coal, Inc., which traded down to their lowest levels of the past decade during the month of July, caught a bid on Thursday, energized by positive comments from Republican presidential candidate Mitt Romney during the presidential debate last night. Romney’s comments and the subsequent 8% rally in ACI shares to an intraday high of $6.72 this morning, stoked bullish activity in options on the coal producer as well. Options traders positioning for shares in Arch Coal to extend gains purchased around 5,000 calls at the Nov. $7.0 strike for an average premium of $0.43 apiece. Call buyers profit at expiration next month as long as shares in Arch Coal rally more than 10% to surpass the average breakeven price of $7.43. Bullish activity spread to the higher Nov. $8.0 strike where options players snapped up around 1,000 contracts at an average premium of $0.21 each. Traders long the $8.0 strike calls make money if shares in the coal company surge 22% over Thursday’s high of $6.72 to exceed $8.21 by November expiration. Current volume in Arch Coal options, topping 20,000 contracts as of 12:40 p.m. ET, is more than twice the stock’s average daily volume of 8,849 contracts. Call options comprise most of the volume, with around three calls changing hands on the stock for each single put option in play so far in the session.

NFLX - Netflix, Inc. – Short term bullish bets initiated on Netflix earlier this week have paid off for some options traders, with shares in the provider of online streaming video services soaring more than 20% since Monday morning on positive comments from T2’s Whitney Tilson and other analysts. Trading traffic in upside call options that have one full trading session remaining until expiration indicate some strategists are positioning for shares in NFLX to extend gains into the weekend. Shares in Netflix tacked on 6.6%…
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Michael Kors Options On Trend After Earnings Blowout

 

Today’s tickers: KORS, AMLN & ACI

KORS - Michael Kors Holdings Ltd. – A number of options strategists appear to have benefitted handsomely from bullish positions held in the House of Kors today, with shares in the luxury retailer ballooning on better-than-expected third-quarter earnings. Shares in Michael Kors Holdings Ltd. have more than doubled since the December IPO, trading 22.7% higher on the day at $41.25 as of 11:40 a.m. Options on Kors are abuzz with after-earnings activity, with around 3.6 call options changing hands for each single put option in play. Some traders that placed bullish bets on the retailer in the weeks leading up to earnings in some cases saw the value of their positions sky-rocket. One buyer of a 1,500-lot Feb. $34/$37 call spread at an average net premium of $1.05 per contract on Feb. 9th may reel in maximum possible profits on the position at expiration, given shares in KORS are now trading well above the upper $37 strike. Call open interest in the front month is heaviest at the $33 strike where more than 5,480 positions were opened before today. It looks like most of the volume was generated in a single block of 4,831 calls that traded at $1.15 each on Feb 7th. The calls traded to the middle of the market one week ago with the bid/ask showing $1.05/$1.30. Today, these deep in-the-money calls trade at bid/ask of $8.20/$8.40 as of 12:15 p.m. The impact of better-than-expected earnings on the shares certainly makes for a happy Valentine’s Day for the trader in the event he or she purchased the contracts last week or a rather Grey day were the calls originally sold. Finally, investors positioning for shares in Kors to extend gains snapped up in-the-money calls at the $40 strike in February and March, as well as picked up around 255 calls out at the May $44 strike at an average premium of $1.56 each.…
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Feeding Frenzy Erupts In HPQ Options

 

Today’s tickers: HPQ, MS, ACI & ARIA

HPQ - Hewlett-Packard Co. – Options covering Hewlett-Packard Co. are densely populated today on news the company’s board is meeting to discuss ousting CEO, Léo Apotheker, less than one year after he was hired to replace former-HPQ CEO and current co-President of Oracle, Mark Hurd. Hope that a shakeup may get HPQ back on track, and speculation that the board may select former eBay CEO, Meg Whitman, to head the company, sent shares in the trodden-down stock up as much as 11.7% today to $25.10. Options implied volatility on Hewlett-Packard earlier rose to 56.05%, but currently stands 20.05% higher on the session at 53.47% as of 1:40 pm ET.

Investors have now exchanged more than 205,000 option contracts on HPQ, with much of the activity taking place in the front month. Calls are trading roughly 1.8 times to each single put option in play thus far in the session. In-the-money calls are popular with buyers positioning for shares to appreciate, while out-of-the-money calls suggest more of a mixed picture. Trading traffic in HPQ calls is heaviest at the October $25 strike, where upwards of 26,100 contracts changed hands against open interest of 11,574 positions. The Oct. $25 strike call was bought and sold in roughly equal numbers. Similar two-way trading is apparent in the Oct. $26 and $27 strike calls, but trading in deep out-of-the-money calls in the October contract was dominated by sellers. Meanwhile, investors positioning for shares to potentially surrender today’s gains in the next several weeks to October expiration, snapped up in- and out-of-the-money puts. Volume in the Oct. $23 strike put soared to 30,000 contracts in early-afternoon trade, trumping previously existing open interest of 3,737 lots. Buyers of the bearish options paid an average premium of $0.89 per…
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Arch Coal Set to Rebound?

Today’s tickers: ACI, MHS & JPM

ACI - Arch Coal Inc. – We’re scratching our heads trying to fathom out why an investor is plundering deeply monied put options in Arch Coal on Friday. Shares in the mining behemoth have slumped recently and indeed today have filled a technical gap to the November high at $26.62. Buyers have resumed and the stock could easily land in the black today. Yesterday investors drove shares lower after the company announced the issuance of $1.3 billion worth of fresh stock to be partially used to finance the purchase of International Coal Group later in June. The secondary IPO was offered at a discount to an already weakening market cap to entice buyers and once swallowed, one investor appears to be banking on a recovery. A credit put spread was deployed earlier Friday with an investor taking in a net premium of $1.35 by writing the $30 puts and buying the less costly $28 puts. We can only assume that this bull expects a rebound to lift the stock back above $30 rendering both options worthless leaving him holding the cash.

MHS - Medco Health Solutions Inc. – A rally in healthcare company, Medco saw its shares surge from $51.80 in late-March to $64.92 in mid-May. This week it cratered back to $56.50 before steadying and today its shares stand at $58.27 having lost a contract to provide the Federal Employee Program (FEP) with mail-order and specialty pharmacy benefits. FEP awarded its 2012 contract to CVS Caremark instead and follows the loss of a key contract to provide Calpers employees with health services. A call option butterfly expiring in July has one bold option trader banking on a summer rebound to $65.00. The investor bought 12,000 calls at each of the $60 and $70 strikes…
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Weekly Wrap-Up – Buffett’s Daring Derivative Deal Does Well

I was going to talk about Buffett's annual letter to investors.

Fortunately, I procrastinated and other people did some detailed reporting like Ravi Nagarajan, Andy Fry, Scott Patterson and Joe Del Bruno – who does a great job of pointing out that Berkshire's 4th quarter results were propped up by Buffett's $1.05Bn gains in derivatives betting (something Buffett himself once called "weapons of mass financial destruction" but, as we well know – if you can't beat them…), which accounted for 1/3 of Berkshire's $3.06Bn profits

Buffett's biggest bet was selling a put against the S&P 500 back in March – a move I said at the time was BRILLIANT and Buffett himself now says about his own options trading:  "We are delighted that we hold the derivatives contracts that we do.  To date, we have significantly profited from the float they provide. We expect also to earn further investment income over the life of our contracts."  

What did Buffett do?  Exactly what we teach you to do here at PSW - he took advantage of an irrational move in the markets and SOLD INTO THE EXCITEMENT, getting a fat premium from some sucker that bet the S&P would not hold 666 5 years from now.  Buffett effectively sold $5Bn worth of puts that expires worthless at S&P 700 between 2019 and 2027, putting $5Bn in his pocket and holding aside $1Bn in margin, which is how much he's already ahead on the bet.  Like a good options trader, he has a plan and he's trading his plan, making sure his investment is on track and patiently letting time do it's work as it eats away at the put-holder's premium. 

What about the risk?  Well I can't speak for Buffett's stop-loss technique but we're talking about a company that has (had) $40Bn in cash using their excess margin to make a $5Bn bet that the S&P would not stay below 700 for 10 years.  Buffett and I both tell people – NEVER buy a stock (or sell a put against one) that you are not willing to own for 10 years.  The S&P was 5% below at the time and would have had to drop, perhaps, 20% more to cost him $1Bn so let's call the stop 550 on the S&P where Buffett risked 2.5% of his cash against a posible 400% gain on his $1Bn risk allocation over 10+ years.  While it is true that if the
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Option Bulls Covet Coal-Calls on ACI

Today’s tickers: ACI, MGM, EWJ, HSY, YHOO, TIE & GLD

ACI - Far-term option bulls were not discouraged from establishing optimistic positions on the coal producer today despite the nearly 2% decline in shares during the trading session to $17.84. Investors looking for shares to rally significantly by the start of 2010 purchased 2,000 calls at the January 23 strike for an average premium of 70 cents apiece. ACI would need to rally 33% higher for individuals long these calls to breakeven at $23.70 by expiration. Option traders also picked up 2,000 calls at the April 2010 22 strike for 1.50 per contract. Finally, curious call spreads appeared in the January 2011 contract. The trades were a bit blurred but it seems likely that the activity represents a ratio call spread. If this is the case, the investor responsible for the trade purchased about 3,000 calls at the January 30 strike for 1.40 each. These contracts were spread against the sale of some 6,000 calls at the higher January 35 strike for 93 cents premium. The trader receives a net credit of 46 cents on the transaction. He will retain the full credit and add to that amount if shares rally higher than $30.00 by expiration. Maximum potential profits on the spread amount to 5.00 (excluding the credit received today), achieved in the event that shares of ACI surge a whopping 96% from the current price by expiration in January 2011. – Arch Coal, Inc. –

MGM - The casino operator attracted bullish bets by option traders today amid a more than 7.5% rally in shares to $10.13. Notable near-term call interest was apparent at the September 11 strike price where more than 7,100 lots exchanged hands. Approximately 5,500 of the contracts were purchased for an average premium of 23 cents apiece. Investors long the calls will begin to accrue profits if shares of MGM can rise 11% higher to surpass the breakeven point at $11.23 by expiration in less than two weeks. Traders clearly favored MGM calls over puts during the session as evidenced by the call-to-put ratio of more than 3-to-1 on the stock today. – MGM Mirage, Inc. –

EWJ - The EWJ jumped onto our ‘most active by options volume’ market scanner this afternoon after one investor juggled massive chunks of calls on the stock. Shares of the exchange-traded fund are currently up 0.5% to $10.18. The trader…
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Phil's Favorites

Miami Condo Boom Ends: Sellers Find Few Buyers, Inventory Soars

Courtesy of Mish.

Thanks to cheap money and an influx of foreign buyers, Florida had its second condo boom in a decade.

And once again, that boom has turned to bust. Speculators seek to unload condos but find few buyers.

Please consider Miami’s Condo Frenzy Ends With Inventory Piling Up in New Towers.

Miami’s crop of new condo towers, built with big deposits from Latin American buyers and lots of marketing glitz, are opening with many owners heading for the exits.

A third of the units in some newly built high-rises are back on the market, though most are listed for more than their owners paid in the pre-construction ...



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ValueWalk

Brian Bares on His Favorite Investment Books and Resources

By Jacob Wolinsky. Originally published at ValueWalk.

Brian Bares on His Favorite Investment Books and Resources

Here are some books he recommends

Berkshire Hathaway letters 

...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The side effects of negative interest rates are 'fanning out across the globe' (Business Insider)

The side effects of Negative Interest Rate Policies in Europe and Japan — what we’ve come to call the NIRP absurdity — are becoming numerous and legendary, and they’re fanning out across the globe, far beyond the NIRP countries.

Bond Traders Say Don't Count Out June Hike After Yellen Remarks (Bloomberg)

...

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Zero Hedge

How Russia Is Preparing For WWIII

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by The Saker,

I have recently posted a piece in which I tried to debunk a few popular myths about modern warfare. Judging by many comments which I received in response to this post, I have to say that the myths in question are still alive and well and that I clearly failed to convince many readers. What I propose to do today, is to look at what Russia is really doing in response to the growing ...



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Chart School

World Markets Weekend Update: The Global Rally Accelerates

Courtesy of Doug Short's Advisor Perspectives.

Seven of the eight indexes on our world watch list posted gains over the past week, up from five the week before, and the average of the eight was an impressive 2.60%. India's SENSEX was the outstanding out performer with a 5.34% surge, and three indexes, France's CAC 40, the Hong Kong's Hang Seng and Germany's DAXK closed the week with gains in the mid-three percents. China's Shanghai was the sole loser with its fractional 0.16% decline. Japan's Nikkei had the second worse performance with a modest gain of 0.59%. Incidentally, the Nikkei about 4% below its late January close when the Bank of Japan adopted its negative interest rate policy.

A Closer Look at the Last Four Weeks

The tables below provide a concise overvi...



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Kimble Charting Solutions

Gold Mining Stocks- Most dangerous time to own them in years?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The rally in mining stocks since the first of the year has been very impressive.

The rally has taken Gold Miners ETF GDX up to test the 23% retracement of the collapse over the past 5-years. At the same time it is hitting the 23% level, two other resistance lines are being put to a test, with momentum at the highest levels in the past 5-years.

Joe Friday Just The Facts...



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Insider Scoop

Graham Media Group To Buy WCWJ, CW affiliate In Jacksonville, NBC Affiliate in Roanoke

Courtesy of Benzinga.

Graham Media Group, Inc., a Graham Holdings Company (NYSE: GHC) subsidiary, said it struck a deal with Nexstar Broadcasting Group, Inc. and Media General, Inc. to purchase WCWJ, a CW affiliate television station in Jacksonville, Florida and WSLS, an NBC affiliate television station in Roanoke, Virginia for $60 million in cash and the assumption of certain liabilities.

The agreement to acquire Nextar Broadcasting included pension obligations. Graham Media Group, Inc. would continue to operate both stations under their current network affiliations.

Graham Media said the acquisition is subject to approval by the FCC, other regulatory appr...



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OpTrader

Swing trading portfolio - week of May 23rd, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

The Biggest Bitcoin Arbitrage Ever?

Courtesy of Chris at CapitalistExploits

Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?

Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.

I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.

I was thinking of this since a buddy of mine recently started ...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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