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Posts Tagged ‘ADM’

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

www.interactivebrokers.com

 
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 what they did not realize was about $6.  

That’s the
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Contrarian Player Sees Visa Recovery Story Unfolding by Jan. 2012

www.interactivebrokers.com

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

www.interactivebrokers.com

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

www.interactivebrokers.com

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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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!

 
 

Zero Hedge

French Unemployed Hits Record High, Hollande Demands EU Budget "Must Be Adapted"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

France's President Francois Hollande states confidently that "everyone should respeoct treaties," then 'Junckers' it with this stunningly hypocritical bullshit, "budget rules must be adapted" to support growth and France "has done what it has to do" on its deficit... one glance at the following chart suggests that Hollande has done nothing and has been enabled by Draghi... What a farce!!

 

 

So:

  • *HOLLANDE SAYS `EVERYONE' SHOULD RESPECT TREATIES
  • *HOLLANDE SAYS FR...


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Chart School

ECRI Recession Watch: Weekly Update

Courtesy of Doug Short.

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.9, down substantially from the previous week's 131.4. The WLI annualized growth indicator (WLIg) is at -0.1, down from 1.0 the previous week and its first negative print since August of 2012.

ECRI has been at the center of a prolonged controversy since publicizing its recession call on September 30, 2011. The company had made the announcement to its private clients on September 21st. ECRI's cofounder and spokesman, Lakshman Achuthan, subsequently forecast that the recession would begin in Q1 2012, or Q2 at the latest. He later identified mid-2012 as the start of the recession. Over the past two years he has been a frequent guest on...



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Insider Scoop

UPDATE: Morgan Stanley Reiterates On ResMed Following 1Q15 Earnings Report

Courtesy of Benzinga.

Related RMD Morning Market Movers Qualcomm Announces New Connected Health Collaborations at Connect 2014

In a report published Friday, Morgan Stanley analyst Sean Laaman reiterated an Equal-Weight rating on ResMed (NYSE: RMD), and raised the price target from $46.19 to $49.57.

In the report, Morgan Stanley noted, “Currency headwinds and part quarter release of the S10 downplayed expectations ahead of the result. Despite this, RMD beat on US revenue driv...



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Phil's Favorites

The Death of the Blue Chip

The Death of the Blue Chip

Courtesy of 

My title above is only half-kidding. Because everytime Wall Street pronounces “The Death Of” anything, that’s pretty much when it starts working again. But there is an important point being made in a new article at the Wall Street Journal about the current state of some of our biggest stalwart stocks and their underlying businesses, a point I made two days ago here

Here’s the Journal:

A third of the companies in the Dow Jones Industrial Average have posted shrinking or flat revenue over the past 12 m...



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All About Trends

Mid-Day Update

Reminder: David 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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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 2014

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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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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