Posts Tagged ‘ADM’

Three-legged Bull Eyes Archer-Daniels-Midland Co. Options

 
Today’s tickers: ADM, ETFC, VG & XLNX

ADM - Archer-Daniels-Midland Co. – A couple of weeks ago demand for call options on one of the world’s largest processors of corn, wheat, cocoa and other feedstuffs jumped after Warren Buffet said Archer-Daniels-Midland is the “kind of company we look at” in regards to the search for acquisition candidates. Today, ADM options appear to be popular with at least one strategist positioning for further upside movement in the price of the underlying shares through the end of 2011. Shares in the food products company increased as much as 1.4% this morning to $31.00 by 11:30 am in New York. The stock still trades at an 18.5% discount off its more than 3-year high of $38.02 attained in February. Bullish action in ADM options and the bump-up in shares follow a study released by Purdue University economists on Tuesday showing, among other things, that high food prices are expected to persist for the next one to two years. The U.S. government in February said U.S. farm income may reach $94.7 billion this year. Archer-Daniels-Midland is scheduled to report fourth-quarter earnings ahead of the opening bell on August 2. One options trader expecting shares to near multi-year highs by December expiration initiated a three-legged bullish transaction straight out of the gate this morning. It looks like the investor sold 1,000 puts at the December $28 strike for a premium of $1.16 each in order to finance the purchase of a 1,000-lot December $32/$36 call spread at a cost of $1.14 apiece. The sale of the put options more than offset the cost of the bull call spread, thereby yielding a net credit of $0.02 per contract to the investor. The trader adds to his gains in the event that shares in ADM rally another 3.2% over the current price of $31.00 to surpass the effective breakeven price of $32.00 at expiration. Maximum potential profits of $4.02 per contract, including the net credit received, are available to the investor should shares in the feedstuffs producer jump 16.1% to trade above $36.00 at expiration day in December. Shares in ADM last traded above $36.00 at the beginning of May.…
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Which Way Wednesday – Wherefore Art Thou QE3?

China is still rolling along and the Fed says "maybe" on QE3.

That was all it took to get us to yesterday’s highs but we took the money and ran at 2:24, when I told Members in Chat "DON’T BE GREEDY!"  As I had mentioned in yesterday’s post, our Morning Alert to Members put us long on Dow Futures (/YM) at 12,400 and Nasdaq Futures (/NQ) at 2,350, which made vast sums of money of course with the Dow up well over 100 points at the time.  During Member Chat yesterday, we took advantage of the early dip to go long on TBT, FAS, WFR and QQQ  while killing our short positions on USO, EDZ and FXI (see Monday’s post) as they had a great run and WE ARE NOT GREEDY!  

Of course we have our bull call spreads from last week so we’re pretty bullish BUT still cautious because our indexes are not holding their lines – especially the always-troubling NYSE, which did not hold the "Must Hold" line and when we name a line "Must Hold" well, it MUST be held!

The other thing I said to Members at 2:24 in yesterday’s Chat was:   

Keep in mind this rally has 100 Dow points to go just to get us back to Friday’s close (12,660) so don’t be impressed with less (S&P was 1,344, Nas 2,860, NYSE 8,411 and RUT 852).  

At the moment, we’re not even getting a 50% bounce of this morning’s bottom and Friday’s close was way below Thursday so it’s very easy to give us a "rally" by tanking the Dollar and floating rumors of MORE FREE MONEY but, for now – it does nothing to change the greater reality.  

That’s good advise for today as well.  A mere hint of QE3 does not change the cost of Italian debt, nor will it help our Treasury sell $21Bn worth of 10-year notes today at 2.9% (what kind of idiot would trust our Government to give them back Dollars with less than 3% interest to guard against inflation?), nor will it employ people and we ABSOLUTELY know that QE3, if done like QE2, is going to
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Options Traders Feed on Archer-Daniels-Midland Co. Calls

Today’s tickers: ADM, TRW, RDWR & BPAX

ADM - Archer-Daniels-Midland Co. – Warren Buffet’s comments that Archer-Daniels-Midland is the “kind of company we look at” in regards to hunting for acquisition candidates fueled heavier than normal activity in ADM options, bumped its shares up as much as 1.8% and pushed options implied volatility up 20.7% to 30.82% today. In an interview on Bloomberg Television this morning, Buffet also cited General Dynamics and Exelon Corp. as attractive, but options on those names remain relatively quiet. Shares in Archer-Daniels-Midland, one of the world’s largest processors of corn, wheat, cocoa and other feedstuffs, are up 1.00% at $30.75 just before 1:00 pm on the East Coast. ADM call volume jumped, with calls changing hands roughly 6 times on the stock for each single put option in play. Much of the put activity, though light in comparison to interest in calls, appears to be the work of bullish players selling the contracts to harvest available premium. Investors positioning for shares to extend gains scooped up out-of-the-money calls across several expiries. Call volume is heaviest out at the September $31 strike where more than 14,000 contracts changed hands against 3,476 previously existing open positions. While roughly half of the calls traded to the middle of the market, it looks like at least 5,400 of the contracts were purchased for an average premium of $1.13 a-pop. Call buyers profit if shares in ADM rally another 4.5% to surpass the average breakeven price of $32.13 by September expiration. Nearer-term optimists purchased August $32 and $33 strike calls for premiums of $0.57 and $0.28, respectively. These investors make money if shares climb around 6.0% and 8.2% by expiration next month. Fourth-quarter earnings from ADM are expected to hit the stands on August 2 ahead of the opening bell.…
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Fickle Friday – Google Up, Dollar Down, GE Down

The dollar is making new lows.

As I've been saying all week(s) that is the story that is driving the market.  Still people interview me and ask me how high I think the markets can go which is kind of silly because, as I keep trying to explain, the markets aren't going anywhere, the only variable is the currency they are priced in.  Why do people not get this?  Why do other financial writers not get this?  Why do TA guys not get this?  Why does nobody talk about this in the MSM? 

Sure they talk about the weak Dollar or the strong Yen (but rarely the strong Pound or Euro, because it is contrary to the average viewer's vision of America and we don't want to upset the viewers, do we?) but who ever shows you a simple and obvious chart of the S&P or any other index priced in a foreign currency?  How hard is this to understand?   

 

So, if you are a Japanese investor, watching your US equities, THIS is how they are performing.  It's not much different from an EU perspective, where we FAILED the 200 DMA on 9/21 and the 50 DMA made a death cross last week.  Yet I still see chart guys running out on CNBC telling us their TA tells them we can go to the moon.  Sure, we can go to the moon.  Price your stocks in Hungarian Forints and suddenly the S&P is at 240,000 – all we have to do is ignore the fact that the currency has changed – JUST LIKE WE DO WITH THE DOLLAR – and we are rich, Rich, RICH!  

Yes, that would be ridiculous.  Almost as ridiculous as a bunch of grown men, who make a living analyzing the markets, acting as if the underlying value of the currency we are pricing things in doesn't matter.  Do you know what the World's hottest market was in 2007?  Zimbabwe!  That sucker would gain 500-1000% in a single day – invest over there and you made money hand over fist.  Howard Stern had a game called "Who Wants to be a Turkish Millionaire" and ho would give away a Million Turkish Lira and the joke was how excited the contestants were and how much they would be willing to humiliate themselves for…
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Contrarian Player Sees Visa Recovery Story Unfolding by Jan. 2012

Today’s tickers: V, EMC, MON, SAY, MJN, ADM, BBY, EDMC, EBAY & CHS

V – Visa, Inc. – Shares of the global payments company plunged 4.7% this afternoon to an intraday and new 52-week low of $64.90 following reports that said federal caps and pending litigation may limit Visa’s ability to increase prices. The price of the underlying was also helped lower by a downgrade to ‘market perform’ from ‘outperform’ at Sanford Bernstein, where analysts have a 12-month target price of $77.00 a share on the stock. The sharp decline in the price of the credit card issuer’s shares inspired near-term bearish options trading. More interesting, however, were the contrarian players seen initiating bullish positions in the longer-dated January 2012 contract. One optimistic strategist enacted a three-legged bullish combination play to position for a rebound in Visa’s shares. The investor appears to have sold roughly 2,500 puts at the January 2012 $50 strike for premium of $4.39 each, purchased about the same number of January 2012 $70 strike calls at an average premium of $8.37 a-pop, and sold approximately 2,500 calls at the higher January 2012 $90 strike for a premium of $2.50 apiece. The average net cost of the transaction reduces to $1.48 per contract. Thus, the contrarian player stands ready to make money should Visa’s shares jump 10.1% over today’s low of $64.90 to exceed the average breakeven price of $71.48 by expiration day. Maximum potential profits of $18.52 per contract are available to the investor should shares surge 38.7% to trade above $90.00 by January 2012 expiration. Visa’s shares last traded above $90.00 back on May 4, 2010. Options implied volatility on Visa, Inc. is up 10.8% at 33.75% with just over 20 minutes remaining ahead of the closing bell.

EMC – EMC Corp. – A large chunk of call options were purchased on EMC Corp. in early afternoon trading, however, it looks like the investor responsible for the transaction is taking a bearish stance on the stock rather than a bullish one. EMC’s shares rallied as much as 2.25% in the first half of the trading day to reach an intraday high of $20.43. The current 52-week high on the stock is $20.97, attained back on August 4, 2010. At first glance, the purchase of 20,000 calls at the January 2011 $21 strike at a premium of $1.00 each looks like a bullish bet by an…
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Bulls Board Continental Airlines As Shares Rise

Today’s tickers: CAL, RSH, FLEX & ADM

CAL – Continental Airlines, Inc. – Bullish options strategists initiated a couple of put credit spreads on Continental Airlines today with shares of the U.S. air carrier flying 4.35% higher to $24.00 as of 12:30 pm (ET). Investors populating CAL options are forecasting clear skies for the firm through September expiration and expect the price of the underlying shares to remain at least above $20.00 for the next few months. One of the bullish spreads involved the sale of 5,000 puts at the August $20 strike for a premium of $0.56 apiece, marked against the purchase of the same number of puts at the lower August $18 strike for a premium of $0.32 each. The investor responsible for the transaction pockets a net credit of $0.24 per contract, and keeps the full amount received today as long as CAL’s shares exceed $20.00 through expiration day next month. The trader receives the $0.24 credit in exchange for bearing the risk that shares crash and burn ahead of expiration. Losses on the position start to accumulate if Continental Airlines’ shares plunge 17.66% from the current price of $24.00 to breach the effective breakeven point to the downside at $19.76. The investor is slammed with maximum potential losses of $1.76 per contract should shares plummet 25% to trade below $18.00 ahead of expiration in August. An identical 5,000-lot put credit spread was established in the September contract. This transaction yields a net credit of $0.35 per contract to the responsible party if shares remain above $20.00, and results in maximum potential losses of $1.65 per contract if CAL’s shares slip beneath $18.00 by expiration day in September.

RSH – RadioShack Corp. – Call options on the retailer of consumer electronics goods and services are flying off the shelves this morning with RadioShack’s shares trading 3.95% higher on the day to stand at $22.37 as of 11:15 am (ET). Earlier in the session RSH shares rallied more than 7.6% to secure an intraday high of $23.16. Bullish options investors expecting continued appreciation in the price of the underlying stock this week picked up approximately 2,200 calls at the July $22.5 strike for an average premium of $0.60 apiece. Call buyers at this strike stand ready to amass profits should the retailer’s shares exceed the average breakeven price of $23.10 by expiration on Friday. Traders anticipating a more…
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Bank of America Bearish Option Position Closed – Shares Rally

Today’s tickers: BAC, MCD, ADM, XRT, CVS, STT, PFE, CVS, FSYS & AEO

BAC – Bank of America Corp. – One investor banked profits today by unraveling a massive bearish credit spread established back on October 28, 2009. The trader’s decision to take profits ahead of expiration could be a bullish sign for BAC. Shares are trading up 2% near the end of the trading day to stand at $15.00. The investor originally sold approximately 130,000 calls at the November 16 strike for an average premium of 49 cents apiece, spread against the purchase of the same number of calls at the higher November 17.5 strike for 15 cents each. The trader received a net credit of 34 cents per contract on the transaction. Today, the investor left money on the table by closing out ahead of expiration. It appears he sold the upper strike calls for 4 pennies and bought back the lower strike calls for 19 cents apiece. Net profits received for unraveling the spread amount to 19 cents per contract for a total of $2.47 million. One might interpret such a decision as a bullish signal for BAC because the trader decided to walk away with 19 cents – half of the maximum profit potential of 34 cents. The investor would only have been able to retain the full 34 cents if shares traded beneath $16.00 through expiration day in November.

MCD – McDonald’s Corp. – A bullish risk reversal in the January 2010 contract significantly reduced the price paid by one investor establishing an optimistic stance on the fast-food chain. Shares of MCD are trading 1.5% higher today to $61.20 despite yesterday’s downgrade to ‘hold’ by analysts at EVA Dimensions. The investor sold 13,000 put options at the January 60 strike for an average premium of 1.91 apiece to partially offset the cost of purchasing 13,000 in-the-money calls at the same strike for 2.51 each. The net cost of the reversal amounts to 60 cents per contract.

ADM – Archer Daniels Midland Co. – Food products company, Archer Daniels Midland, jumped onto our ‘most active by options volume’ market scanner this afternoon due to bullish activity in the March 2010 contract. Shares edged 0.5% higher to $32.37 during the trading session after the firm revealed better-than-expected first-quarter profits of 77 cents per share. One investor sold out-of-the-money put options to partially finance the purchase of a…
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Zero Hedge

Armed Man With A Knife Rams Car Into Pedestrians In Heidelberg; Attacker Shot By Police

Courtesy of ZeroHedge. View original post here.

In what may be the second vehicle-based terrorist attack in Germany in as many months, moments ago the AP and local press reported that according to German police a man rammed his car into a pedestrian area in a central square in the city of Heidelberg, injuring three people, then fled armed with a knife, and was subsequently shot after being tracked down by officers.

Police spokesperson Anne Baas said one of the three people hit outside a bakery on Saturday afternoon was seriously injur...



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Phil's Favorites

Dutch Parliament to Debate Leaving the Eurozone: Nexit on the Way?

Courtesy of Mish.

Potential Eurozone disruption possibilities keep compounding. The Netherlands Parliament will now debate leaving the Eurozone.

For example, the Netherlands Parliament will now debate leaving the Eurozone.

In long-winded wording for a potential “Nexit”, Reuters reports Dutch relations with euro up for debate after lawmakers commission probe

The Netherlands’ future relationship with the euro will be comprehensively debated by its parliament following elections in March after lawmakers commissioned a report on the currency’s future.

The motion approving the investigation by the Council of State, the government’s leg...



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ValueWalk

Charlie Munger's Parody

By VW Staff. Originally published at ValueWalk.

Notes from Charlie Munger’s annual meeting at the Daily Journal are making the rounds. This parody, from a few years back, was too good not to share again. “One thing about doing something dumb is that you’re unlikely to do it again.”

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Charlie Munger's Parody

A PARODY DESCRIBING THE CONTRIBUTIONS OF WANTMORE, TWEAKMORE, TOT...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Stocks across Europe dived into the weekend (Business Insider)

Stocks all over Europe dived Friday, as markets took a cautious approach and investors took profit after US stocks hit record highs Thursday evening.

Trump Is on the Verge of His Own Bull Market (Bloomberg)

Consecutive gains in the Dow Jones Industrial Average have left it at the doorstep of history, including a 20 percent surge in futures from the early hours of Nov. 9 that could be loosely framed as the president’s own bull market.

...



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Digital Currencies

As Bitcoin Surges To Record High, China Prepares Its Own Digital Currency

Courtesy of Mike Shedlock (Mish)

Bitcoin hit an all-time high over $1200 today.

Traders are happy because the SEC is expected to rule on a Bitcoin ETF by March 11.

Meanwhile, Bloomberg reports China Is Developing its Own Digital Currency.
 

After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central...

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Kimble Charting Solutions

Crude Oil; Energy stocks suggesting its about to fall, says Joe Friday

Courtesy of Chris Kimble.

Below takes a look at the price action of Crude Oil, Energy ETF (XLE) and Oil & Gas Exploration ETF (XOP) over the past three years.

Could Energy stocks be suggesting the next big move in Crude Oil again? Which direction are they suggesting?

CLICK ON CHART TO ENLARGE

At this time the intermediate trend in Cru...



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Chart School

Good Recovery

Courtesy of Declan.

In early morning action it was a clear swing to sellers after yesterday's non-event. However, buyers came back and were able to make a good chunk of these losses into today's close.

Large Caps remained the most attractive as defensive stocks often are during times of doubt. The S&P registered higher volume accumulation as intraday action proved to be relatively tight.

The Nasdaq suffered larger losses, but there was no distribution to go with it. Technicals were relatively immune to today's action.

...

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Members' Corner

People With Cats Will Understand?

Courtesy of Nattering Naybob

Taking a "potty break" from "in the Toilet Thursday" or "Thursday's in the Loo."

This week's subject is self evident, starring two lovable felines Cole and Marmalade in, People With Cat's Will Understand.


...

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OpTrader

Swing trading portfolio - week of February 20th, 2017

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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Mapping The Market

NSA May Be Withholding Intel from President Trump

By Jean Luc

These GOP guys were so worried about Hillary's email server and now we find out that we had something close to a Russian mole in the White House. In the meantime, Trump keeps on using his unsecured phone, had high level conversation in his resort in front of dinner guests! It's getting so bad that rumors are now circulating that the NSA is not sharing information with the WH:

NSA May Be Withholding Intel from President Trump

By 

….Our spies have had enough of these shady Russian connections—and they are starting to push back….In light of this, and out of worries about the White House’s ability to keep secrets, some of our spy agencies have begun withholding intelligence fro...



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Promotions

Phil's Stock World's Las Vegas Conference!

Learn option strategies and how to be the house and not the gambler. That's especially apropos since we'll be in Vegas....

Join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017            

Beginning Time:  9:30 to 10:00 am Sunday morning

Location: Caesars Palace in Las Vegas

Notes

Caesars has offered us rooms for $189 on Saturday night and $129 for Sunday night but rooms are limited at that price.

So, if you are planning on being in Vegas (Highly Recommended!), please sign up as soon as possible by sending...



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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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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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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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