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Posts Tagged ‘AFL’

Bullish Call on Lubrizol Ahead of Deal Drives Big Payday

www.interactivebrokers.com

 Today’s tickers: LZ, AFL, CIGX & TSL

LZ - Lubrizol Corp. – It looks like a well-timed bullish bet on Lubrizol Corp. initiated in April contract calls less than one week ago paid off big time for one options strategist following the announcement of Berkshire Hathaway’s $9 billion acquisition of the specialty-chemicals company this morning. Shares in Lubrizol Corp. shot up as much as 27.3% during the session to hit an intraday and all-time high of $134.20, which is just 80 pennies shy of the $135.00 a share deal reported today. Options volume on the stock is heaviest at the April $110 strike where one trader appears to have raked profits in off of the table within the first 20 minutes of the opening bell. Open interest patterns at that strike suggest around 2,650 calls were picked up for an average premium of $2.35 per contract back on March 9, 2011, when shares in the Lubrizol closed the session at a $106.55. The purchase of the calls, which were the closest-to-the-money contracts available at the time of the transaction, cost the investor around $622,750. Since then, news of the deal with Berkshire Hathaway sent shares in the chemical company soaring, driving up the value of the now deep in-the-money April $110 call options. It looks like the investor sold the 2,650 calls this morning at a premium of $23.90 per contract. Net profits on the sale amount to $21.55 per contract, or a grand total of $5,710,750. Lubrizol’s overall reading of options implied volatility came crashing down today, and currently stands 88.3% lower at 3.75% as of 11:35am in New York.

AFL - Aflac, Inc. – Shares in the U.S.-based insurance provider, which provides health and life insurance to a large portion of the Japanese population, fell 3.80% to $53.44 by 1:00pm in New York trading. The stock earlier declined more than 6.0% to touch down at an intraday low of $52.12. Investors bracing for further bearish movement in Aflac’s shares picked up April $50 strike…
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Bullish Strategist Positions for Rebound in Plains Exploration & Production Co. Shares

www.interactivebrokers.com

Bullish strategist positions for rebound in Plains Exploration & Production Co. shares

Today’s tickers: PXP, MRVL, SRE, RIMM, MU, AFL, BMY & DELL

PXP – Plains Exploration & Production Co. – The implementation of a three-legged bullish options combination play on Plains Exploration & Production Co. drew our attention to the November contract where one investor utilized call and put options to position for a rebound in the price of the underlying stock. Shares of the independent oil and gas company soured in late afternoon trading, slipping 3.2% lower to stand at $20.98 by 3:35 pm (ET). PXP’s current price of $20.98 represents a 40.4% decline in value since April 15, 2010, when the stock touched an intraday high of $35.41. But, the options activity observed in the November contract today indicates one trader is expecting the stock to rebound sharply ahead of expiration in five months time. The investor essentially sold short put options in order to partially finance the purchase of a debit call spread. The trader purchased 10,000 calls at the November $22.5 strike for a premium of $2.45 each, sold 10,000 calls at the higher November $28 strike for a premium of $0.70 each, and finally sold 10,000 puts at the November $17.5 strike for a premium of $1.30 a-pop. The net cost of the transaction amounts to $0.45 per contract. Thus, the investor responsible for the three-legged play is positioned to make money as long as PXP’s shares rally 9.4% to surpass the effective breakeven price of $22.95 by expiration day in November. Maximum potential profits of $5.05 per contract are available to the trader if Plains’ shares surge 33.5% to surpass $28.00 by November expiration.

MRVL – Marvell Technology Group Ltd. – Global semiconductor maker, Marvell Technology Group Ltd., popped up on our ‘most active by options volume’ market scanner in the second half of the trading session due to rampant bearish options activity in the July and August contracts. Marvell’s shares edged 1.50% lower this afternoon to stand at $17.11 just ahead of the closing bell. Pessimistic traders expecting shares to continue lower ahead of July expiration sold 3,100 calls at the July $17 strike for an average premium of $0.74 each. Call selling spread to the August $15 strike where 2,300 in-the-money calls were sold at an average premium of $2.52 per contract. Perhaps in-the-money call sellers are hoping to keep…
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Put Sellers Endorse AFLAC Rally

www.interactivebrokers.com

Today’s tickers: AFL, IYR, ENDP, ABC, GE, & DOW

AFL – The world’s largest seller of supplemental health insurance reported that second-quarter profits fell 35% on “larger-than-usual realized investment losses”. Despite the decline in earnings, options activity on the stock today revealed bullish sentiment by investors amid a more than 8% rally in shares to $38.34. Traders hoping for further upward momentum purchased 1,200 calls at the September 40 strike price for an average premium of 1.37 apiece. Call-buyers will profit if shares of AFL climb 8% higher and surpass the breakeven point at $41.37 by expiration. Additional bullish positioning was seen at the November 35 strike price where 5,000 puts were shed for 2.63 per contract. Investors short the put options receive premium in exchange for bearing the risk that shares decline by expiration. If the puts land in-the-money, traders would have shares of the underlying put to them at an effective price of $32.37. Otherwise, these put-sellers retain the full 2.63 premium. – AFLAC, Inc.

IYR – Shares of the U.S. real estate exchange-traded fund have moved nearly 4.5% higher during today’s trading session to stand at $36.14. Contrarian option traders flooded the ETF, despite the surge in shares, and drove the put-to-call ratio up to more than 19-to-1. The favored approach taken by bearish investors today was the plain-vanilla put spread. The first of two trades up for discussion involved the purchase of 3,000 puts at the September 36 strike price for a premium of 2.00 apiece spread against the sale of 3,000 puts at the lower September 33 strike for 85 cents each. The net cost of the trade amounts to 1.15 and yields maximum potential profits of 1.85 per contract if shares slip to $33.00 by expiration. A much larger put spread was established further out in the January 2010 contract. The trade may have been the work of an investor seeking downside protection on a long position in the underlying. Otherwise, the trader responsible for the spread is hoping to amass profits on bearish movement in the stock. The transaction involved the purchase of 40,000 puts at the January 30 strike price for 1.97 each, spread against the sale of 40,000 puts at the lower January 25 strike for an average premium of 77 cents per contract. The net cost amounts to 1.20 to the investor who will realize maximum gains of 3.80
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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!

 
 

All About Trends

Mid-Day Update

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Phil's Favorites

"Finest Worksong"

“Finest Worksong”

By John Mauldin, Outside the Box

“In theory there is no difference between theory and practice. In practice there is.” – Yogi Berra, as cited by Ben Hunt in today’s Outside the Box.

Or, to put it in macroeconomic terms, “Why is global growth so disappointing?” In the aftermath of the Great Recession, fearing a deflationary equilibrium (which, as Ben notes, is macroeconomic-speak for falling into a well, breaking your leg, at night, alone), the Fed bought trillions of dollars in assets … and saved the world. Sort of. If you don’t count the reckoning yet to come. The theory was that with all that monetary-policy injections, global growth would spring back to “normal.”

But what did practice...



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Chart School

Deflation at the Fed (and Check Out Commodities)

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Does the Fed prefer Inflation or Deflation? See the footnote below for proof that Deflation has been the Fed trend for decades.

On a more serious note regarding the Inflation/Deflation theme, many feel the Fed's policies will lead to strong inflation. From a stock market perspective, inflation is taking place, as the Dow and S&P 500 are at/near all-time highs.

Another asset class can't say the same thing.


Click for a larger image...



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Promotions

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When you register for the webinar, you’ll also get instant access to following trading videos:

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Insider Scoop

Morgan Stanley Remains Positive On Stryker Corporation

Courtesy of Benzinga.

Related SYK Morgan Stanley Has Critical Questions For Stryker Corporation Going Into Investor Day Top 4 NYSE Stocks In The Medical Appliances & Equipment Industry With The Highest Revenue

In a report published Thursday, Morgan Stanley analyst David R. Lewis reiterated an Overweight rating and $91.00 price target on Stryker Corporation (NYSE: SYK).

In the report, Morgan Stanley noted,...



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Zero Hedge

Goldman's Yellen Press Conference Post-Mortem: "Few Surprises"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Goldman Sachs' Jan Hatzius,

BOTTOM LINE: There were few surprises from Fed Chair Yellen's post-FOMC press conference.

MAIN POINTS:

1. Yellen made two slightly dovish remarks on labor market developments. First, she stated directly that she felt the slow increase in wages was indicative of labor market slack. Second, she said that her own personal view was that there was a "meaningful" cyclical shortfall in participation, when asked about a recent paper by some Fed authors indicating otherwise.

2. On the topic of "considerable time," Yellen declined to provide any specificity on what the phrase means ...



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Sabrient

Sector Detector: Bulls go down swinging, refusing to give up much ground

Courtesy of Sabrient Systems and Gradient Analytics

Although the stock market displayed weakness last week as I suggested it would, bulls aren’t going down easily. In fact, they’re going down swinging, absorbing most of the blows delivered by hesitant bears. Despite holding up admirably when weakness was both expected and warranted, and although I still see higher highs ahead, I am still not convinced that we have seen the ultimate lows for this pullback. A number of signs point to more weakness ahead.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-r...



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OpTrader

Swing trading portfolio - week of September 15th, 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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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 the latest Stock World Weekly. Enjoy!

[Sign in with your PSW user name and password, or take a free trial here.]

Image courtesy of Business Insider, Jay Yarow's This Is The Best Description Of How Apple's Business Works Right Now.

 

...

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Option Review

Big Prints In VIX Calls

The CBOE Vix Index is in positive territory on Friday morning as shares in the S&P 500 Index move slightly lower. Currently the VIX is up roughly 2.75% on the session at 13.16 as of 11:35 am ET. Earlier in the session big prints in October expiry call options caught our attention as one large options market participants appears to have purchased roughly 106,000 of the Oct 22.0 strike calls for a premium of around $0.45 each. The VIX has not topped 22.0 since the end of 2012, but it would not take such a dramatic move in the spot index in order to lift premium on the contracts. The far out-of-the-money calls would likely increase in value in the event that S&P500 Index stocks slip in the near term. The VIX traded up to a 52-week high of 21.48 back in February. Next week’s release of the FOMC meeting minutes f...



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Digital Currencies

Making Sense of Bitcoin

Making Sense of Bitcoin

By James Black at International Man

Despite the various opinions on Bitcoin, there is no question as to its ultimate value: its ability to bypass government restrictions, including economic embargoes and capital controls, to transmit quasi-anonymous money to anyone anywhere.

Opinions differ as to what constitutes "money."

The English word "money" derives from the Latin word "moneta," which means to "mint." Historically, "money" was minted in the form of precious metals, most notably gold and silver. Minted metal was considered "money" because it possessed luster, was scarce, and had perceive...



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Market Shadows

Helen Davis Chaitman Reviews In Bed with Wall Street.

Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).

Helen Davis Chaitman Reviews In Bed with Wall Street. 

By Helen Davis Chaitman   

I confess: Larry D...



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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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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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