Insiders: March to Exit
by Insider Zone - March 15th, 2010 6:49 pm
By Ilene
Let’s take a look at Insider Buying and Selling over the last week or so. These are screen shots from Finviz - the significant buys against a green background first and significant sells against the pink background second. All the buys fit into my screen shot but the sells did not. Click here to see all the sells.
Note that the largest buy in the group, for KITD was at a price of 9.73 (KITD is currently at 11.54). The buy was part of an Equity Offering rather than an open market purchase. Tuzman Kaleil Isaza’s (KITD’s Chairman and Chief Exec. Officer) history of buys is here.
Note selling in favorites such as CSCO, GOOG and AMZN.
Buys
Sells
Continuation of the sell list:
(What's this?)
(THE PRAGMATIC CAPITALIST, 3/1/10)
(THE PRAGMATIC CAPITALIST, 2/22/10)
(The Technical Take, 3/1/10)
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Option Player Cops a Strangle on ConocoPhillips
by Andrew Wilkinson - February 17th, 2010 8:10 pm
Today’s tickers: COP, POT, BAC, HPQ, AMZN, SLV, SPWRA, XEC, WFMI & C
COP - ConocoPhillips – A short strangle employed in the May contract on ConocoPhillips this afternoon suggests one investor expects shares of the underlying stock to remain range-bound through expiration. COP’s shares are down 1.25% to $49.29 with approximately thirty minutes remaining in the trading session. The trader ‘copped’ a strangle play by selling 3,000 puts at the May $46 strike for a premium of $1.77 apiece in combination with the sale of 3,000 calls at the May $52.5 strike for an average premium of $1.13 each. The investor responsible for the transaction pockets a gross premium of $2.90 per contract, and keeps the full amount of premium if ConocoPhillips’ shares trade within the confines of the strike prices described through expiration in May. The short position undertaken in both calls and puts leaves the trader vulnerable to potentially devastating losses should COP-shares swing dramatically in the next few months. Losses accumulate for the investor if shares rally above the upper breakeven price of $55.40, or if the price of the stock plummets through the lower breakeven point at $43.10, ahead of expiration day.
POT - Potash Corp. of Saskatchewan, Inc. – Fertilizer and feed products manufacturer, Potash Corp., attracted bullish options traders this afternoon. POT-shares are up 0.75% today to $114.01 just ahead of the closing bell, which contributes to the more than 14.50% rally in the price of the underlying stock since February 5, 2010, when shares stood at $99.36. Optimistic trading patterns appeared in the March contract where one investor established a ratio call spread. The transaction involved the purchase of roughly 4,500 calls at the March $125 strike for a premium of $1.77 apiece, marked against the sale of about 9,000 calls at the higher March $135 strike for an average premium of $0.52 each. The net cost of the ratio spread amounts to $0.73 per contract. Maximum potential profits of $9.27 per contract pad the investor’s wallet if Potash’s shares rally sharply by 18.50% over the current day’s price to reach $135.00 by March expiration. Shares must increase at least 10.25% before the investor breaks even on the spread at a share price of $125.73.
BAC - Bank of America Corp. – B of A investors have enjoyed an 8.75% rebound in the financial firm’s share price to $15.66 today, up from $14.40 per share back on February…
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Amazon Options in High Demand Following eBook Pricing Concession
by Phil - February 1st, 2010 4:24 pm
Today’s tickers: AMZN, DELL, FXI, AET, XOM, LPX, CSCO, VCI & ITMN
AMZN – Amazon.com, Inc. – E-tailer, Amazon.com, Inc., attracted two-way trading traffic in its options today after the firm gave in to publisher, Macmillan’s, demands to increase the price of digital books. Amazon.com’s concession to Macmillan is fueling investor concerns that the largest internet retailer is relinquishing its pricing advantage. Shares of the online shopping destination slumped more than 8.65% during the trading session to an intraday low of $114.38 – the largest decline in Amazon’s shares in more than one year. Investors inundated Amazon with options trades today, exchanging more than 226,300 contracts on the stock by 2:50 pm (EDT). Option volume generated thus far in the session represents more than 45% of the total 493,697 lots of existing open interest on AMZN. Strong demand for options on the stock as well as a rise in investor uncertainty boosted option implied volatility on Amazon roughly 8.3% higher to 41.44% in afternoon trading. Option traders expecting shares to rebound quickly purchased 2,200 call options at the February $115 strike for an average premium of $5.67 apiece. The $120.67 breakeven price on the contracts suggests call buyers expecting to amass profits in the next few weeks, anticipate a more than 5% increase off the intraday low, by expiration day in February. Call buying and selling in roughly equal proportions was observed at the February $120 strike and at the February $125 strike. Two-way trading traffic of put options is also apparent in the February contract. Contrarian players sold nearly 8,000 puts at the February $115 strike to take in an average premium of $3.58 per contract. Put sellers at this strike keep the full premium received if AMZN’s shares trade above $115.00 through expiration day. The most bearish moves were made at the March $105 strike where 1,100 puts were picked up for an average premium of $2.81 each.
DELL – Dell, Inc. – Bullish investors initiated call spreads on the just-in-time manufacturer of personal computers this afternoon with Dell’s share price up 2.5% to $13.22 on the day. Option traders purchased more than 10,000 calls at the August $14 strike for an average premium of $1.17 apiece, spread against the sale of roughly 10,000 calls at the higher August $18 strike for an average premium of $0.20 each. The average net cost of the bullish trade amounts to $0.97 per contract. Investors…
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Weekend Wipe-Out, the Second Wave!
by Phil - January 29th, 2010 5:57 pm
Another week another 100 points lower.
Yep, that’s all it was, we lost all of 100 points more than last week, when we fell from 10,725 to 10,172 (553 points) and this week we dropped from Friday’s Dow close of 10,172 all the way down to 10,067 yet you would think the world had come to an end to hear the media and the traders freaking out. I’m not going to try to explain it, I can’t. Maybe it’s because going into last week we were very bearish but, starting on the 22nd, we let ourselves finally get a little more bullish AND THE MARKET BETRAYED US!
How could the market not zoom right back up? It always zooms right back up, doesn’t it? As I said a week ago Friday: "Boy, when sentiment shifts - it REALLY shifts!" My closing comment on Friday the 22nd was "Back to cash but leaving disaster hedges, which are looking great now as this is shaping up to be some disaster" and our weekend "Global Chart Review" showed us to be at some very key inflection points, letting us go well prepared into this week:
Manic Monday Market Movement
My Jets lost on Sunday so I was not in the best of moods on Monday. My outlook that morning was: "We still have our disaster hedges in case things get worse but, on the whole, we’re expecting a 1% bounce in the very least off our 5% lines (anything less will be a bad sign)." We were pretty much at the 5% rule on Friday’s close so we focused on the bounce we wanted to achieve in order to get more bullish.
I noted that the levels we were looking for were not exactly 1% retraces (see post for reasons) and our target retraces were: Dow 10,300, S&P 1,105, Nasdaq 2,225, NYSE 7,100 and Russell 625. What were the highs for the week on those indexes? Dow 10,310 (+10), S&P 1,103 (-2), Nasdaq 2,227 (+2), NYSE 7,098 (-2) and Russell 621 (-4). So that’s a net of +4 points out of 21,355 points worth of predictions on the retrace, accuracy to within .019% - not a bad showing for our patented 5% rule.
Please, under NO circumstances subscribe to our daily newsletter, where you would have this kind of information every morning and DO NOT get an Alert Membership where we send out our amazingly accurate watch levels to you every day. Having this sort of advanced information on the markets would be unfair to other traders, who thank you for your restraint…
See how I cleverly used reverse…
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Thank GDP it’s Friday!
by Phil - January 29th, 2010 8:30 am
![[AOT]](http://sg.wsj.net/public/resources/images/MI-BB087_AOT_NS_20100128184816.gif)
At 12:52 yesterday I officially went long on the markets.
This could be a big mistake (in fact, that’s what I said to Members at the time) but the logic was Bernanke would be confirmed (he was) and that we’d have a big GDP number today. Now the reason we’re going to have a big GDP number is because we will have a big build in inventories (we discussed this effect on Jan 14th) as manufacturers got all excited and produced goods that nobody bought and, because it is assumed that goods are only produced in accurate anticipation of demand - this kind of nonsense comes in a positive to our GDP.
Production collapsed during the recession as companies sold from their existing inventories but didn’t order new goods, because of uncertainty about future customer demand. These inventory declines dragged on GDP for six consecutive quarters, the longest streak on record since 1948. The turnaround in inventoris could give us a Q4 GDP in the 5% range. Rational economists prefer to look at final sales to domestic purchasers, a subset of GDP that doesn’t include inventories and trade, to better gauge U.S. economic activity. That category is likely to grow at only a 2% pace, similar to the third quarter but shhhhhhh! - we don’t want to wake the rational economist - who has clearly been asleep since the the mid 90s…
So we went bullish (speculatively), not because we are going to be excited by a 5% GDP number that makes us look like some overheating Third World economy even as another 2M people lost their jobs in Q4. No, we’re bullish because we cynically believe that the sheeple are clueless and will stampede into this number as if the US is recovering and nobody told them until this morning.
Meanwhile, I have a message for the sheeple: Please keep selling us your Google stock. I think this chart of the day is self-explanatory but you never know. This is a chart of the amount of money Google makes per employee, per quarter. Currently they are generating $1.34 MILLION dollars for each person they hire (and they’ve been hiring). For a comparison, Yahoo generates $500,000 per employee yet GOOG currently has a p/e ratio that is 1/2 of Yahoo’s.
Microsoft’s 98,000 employees generate $623,000 each, ORCL’s 86,000 employees pull in just $267,000 each. It’s not a definitve indicator but consider how well they have managed that number through the recession, which…
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Thrilling Thursday - Obama plus Jobs (Steve, not employment) Boost the Market
by Phil - January 28th, 2010 6:15 am
You would think I would have a lot to say about the IPAD but I don’t.
After all, I named the IPad back in December 2008 when I told Members: "AAPL just announced a deal to do Ebooks on IPhones and ITouch and that is the intermediate step towards the IPad, which should be a 2-3x size version of the IPhone that takes the place of a Kindle or a laptop or a notepad or…" I also ran a very close to accurate picture of the IPad back on Sept 11th (and the live images are here), which documents our bullish take on AAPL all the way from $85 and reiterated in Sept at $170 (but we were out at $213 Tuesday, back in at $202 yesterday for the ride back up as we got our expected sell-off during the Apple event) - so this is all old news for us at PSW.
Back in September I said: "So we are happy, happy AAPL owners and Piper Jaffray’s Gene Munster thinks AAPL can sell 2M units of the IPad at $600 each to generate an additional $1.2Bn in revenues in 2010 and I think he’s low. Also, it should be noted that we went with GLW back in December on the premise that millions of touch-screen IPads would use a lot of high-end glass." I am very pleased that the basic model came in $100 lower than my target but, as with IPods - who buys the basic model? Delivery in 60 days means I should hit my sales targets no problem and I it doesn’t look like GLW will be the supplier of IPad glass (LPL seems more likely) but the demand for glass will still be stunning and GLW is up 26% since September so we’re not going to whine about it (I still like them).
OK, enough about toys, on to the President, who gave his State of the Union Address last night, making the following notable points (my notes in brackets):
I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I’m also proposing a new small-business tax credit, one that will go to over 1 million small businesses who hire new workers or raise wages. While we’re at it, let’s also eliminate all capital gains taxes on small-business investment and provide a tax incentive for…
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Wild Weekly Wrap Up - Only Halfway Through January!
by Phil - January 16th, 2010 8:29 am
Wheee, what a ride!
The week can be neatly summed up by my 1:35 comment to Members in yesterday’s chat, summed the week up quite nicely as I said: "So funny, a whole week of gains I thought were ridiculous wiped out in 4 hours." Of course it’s easy to laugh when you play the market correctly - as I had said in the morning post, we had cashed out into Thursday’s run up and planned on going bearish through the weekend but it turned out we got our sell-off early, jumping the $100K Portfolio, for example, up 12% in one day - enough to send us back to cash rather than risk a weekend reversal.
We laid the groundwork for this little sell-off in last weekend’s posts as we put up an aggressive Buy List for Members but in my regular weekend post we emphasized the need to cover our buys with "Disaster Hedges" as we were heading to the tops I had predicted when I published the "Last Charts of the Decade," where I set resistance target of Dow 10,457, S&P 1,135, Nasdaq 2,314, NYSE 7,389 and Russell 638. As you can see, I pretty much hit them on the head, other than the Dow but that’s because our year-old 5% rule calculations did not account for the change in the Dow that replaced C and GM with TRV and CVX, who added about 100 Dow points since their inclusion so we started using 10,549 this month and we’ll make it 10,557 for today’s chart, which makes perfect sense looking at this group (I added the Transports as they are fell right off our 2,000 target, giving us the early warning that things were not right):
As you can see, the 5% Rule rules! I will apologize for being such a grump this week but the rally was really starting to annoy me as it was so blatantly forced up through our levels without a proper test that is was really getting me down about the markets. I don’t mind that the markets are manipulated, that’s been going on since markets were invented - it’s stupid and destructive manipulation that bothers me, the kind that, long term, destroys more investor confidence than it builds and squanders capital resources on the "wrong" companies (and now, ETFs!).
In this case, very precious investor capital is being steered into commodities, which is a very poor use of recessionary capital as is inflating the money supply to…
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Calls Hot on OSI Systems After Failed Terror plot
by Andrew Wilkinson - December 30th, 2009 4:12 pm
Today’s tickers: OSIS, SEED, AMZN, KONG & TER
OSIS - OSI Systems Inc. – Investors were keen to put a name on the company that might benefit from a boost to security spending, which is behind the 12.5% rally in shares of OSI Systems today to $28.22. The previous 52-week high stood at $25.64 in the California-based company that makes critical electronic gadgetry to include complex security and inspection systems. The fallout from the Christmas Day arrest of a young Nigerian who apparently attempted to set off an explosive device on a Detroit-bound airplane is fast trickling through to who might win orders from the office of homeland security. Option volume in OSI Systems is a rare thing as indicated by the scant vale of open interest at 4,341 lots. Call option buyers at the January expiration saw to it that the company remains on investors’ radar after they likely doubled the prevailing number of option positions on Wednesday. Some 4,700 calls at the $30 strike were bought starting at 25 cents per contract and rising to as much as $1.00 each as the shares rose in value. The delta reading of 33% implies a one-in-three chance that the share price will rise by a further 6.3% within the next 18 days.
SEED - Origin Agritech – There was a wave of call option activity at Origin Agritech following the technology-focused seed development company’s announcement that it had bought back the remainder of its outstanding notes. The move will probably strengthen its balance sheet and helped spur its share price 25% higher to $12.15. Last month the stock rose to about $15 after the Chinese government said it would work with the company to grow modified corn and rice. Heaviest call volume was seen at the January $12.5 strike where 4,400 lots have traded from Tuesday’s close of 10 cents to 90 cents. The $15 strike calls have traded 1,600 times at an unchanged 30 cents. Option implied volatility spiked from 80% to 103% as uncertainty grew as investors demanded higher premiums to sell options. At the January 10 strike investors appeared swift to sell more than 4,000 put options as low as 40 cents, down from Tuesday’s closing price of $1.10 in the expectation that Origin will remain firm.
AMZN - Amazon Inc. – One investor appeared to take out some protection against a possible decline in shares of online-retailer Amazon.com where shares slipped 2.6%…
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Wild Weekly Wrap-Up
by Phil - December 19th, 2009 8:20 am
Wheee - that was fun!
Last week, I asked the question were we "Too Bearish or Just Too Early?" I said in that wrap-up: "This Friday the market topped out about 150 points higher than last Friday, closer to the top of our range so we went much more bearish on Friday, perhaps too bearish considering this was the best Friday finish since Nov 6th and we haven’t had a down Monday since October 26th." We did get the move up we feared on Monday but we stuck to our guns and had a fabulous week.
Even as the market was going against us Monday morning, my first Alert of the week to members at 9:44 said: "I’m still more inclined to look downward at: Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,200 and Russell 600… I’m still bearish because oil is weak, gold is weak, the financials (XLF at 14.30) are weak and most of the good news we are hearing is nothing but fluff." That was a pretty good call as we hit our target levels yesterday and held them, so we flipped more bullish right at 11:30 on Friday, in what was some very good timing for our intra-day play.
We are still on a stock market roller coaster that’s going to have plenty of ups and down in the thin, holiday trading that will likely characterize the end of the year. The market will be closed 2 Fridays in a row and good luck finding people around this Thursday or the next one so 6 proper trading days left to 2009 at best. We got out - that drop was very satisfying and we’ve moved mainly to cash (our $100K Portfolio has $88,000 in cash at $107,249 at the end of it’s first month). Last week we were able to cash out the bull side, this week we got satisfaction from our bear plays and that leaves us footloose and fancy free to have fun the next two weeks. If our day trading goes as well as it did on Friday, we can end this year with quite a bang.
Manic Monday - Dubai, CitiGroup and GS Move Markets
This picture says it all. When you want to blow smoke up investors’ asses, the dream team of economic BS is Greenspan and Cramer, who appeared on Meet the Press last Sunday to tell us that the market is smarter than reality and Greenspan actually had the nerve to say that we are underestimating…
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Familar Friday Morning - Deja Vu All Over Again!
by Phil - December 11th, 2009 8:28 am
I’m getting some real deja vu here.
Remember last Thursday, when Japan went up 3.8% and our futures jumped almost 100 points? No not yesterday, LAST Thursday. Yes, and that day ended up going down about 100 on the day, which was nice because we shorted into the pump (and we were already short for the week anyway. So yesterday felt a little like that with just about 100-point gap up in the morning, followed by a downward slope all day. Today is now feeling like last Friday, where we got another 150-point run-up on the futures but finished the day up only 50 points. As I’ve been pointing out for quite some time, 200% of the last two week’s moves advances came in very thin, pre-market trading - the balance of the rest of the day is selling, punctuated by stick saves into the close.
Our man Cramer says you should take this as a sign to BUYBUYBUY (and Retail of all the stupid things) but I say it’s time to RUNRUNRUN as the inmates clearly have control of the asylum and we have better things to do in the last two weeks of the year than play "guess what BS moves the market this morning." Last Friday it was the Jobs report, which we already knew would LOOK great as the seasonal adjustments made easy comps but we also knew it was a fantastic shorting opportunity (see last weekend’s Wrap-Up).
So we woke up this morning to the same nonsense as last week and what do we do? We short the market of course! While you were sleeping we Emailed a 3:54 am Alert to our Members indicating the Dow Futures were ripe for a short play at 10,400. We followed through with that play in chat and were stopped out at an average of 10,389, just 11 points but very satisfying at $5 per point per contract. We don’t play the futures very often - only when it’s obvious. Our next entry point is a cross below 10,390 with a stop at 10,395 (10-point trailing to be safe ahead of Retail Data). This morning we had an international pump-fest including:
- A regulatory change, designed to let them temporarily count billions in future tax benefits as capital.
- Moody’s Investors Service said it has no current plans to lower its top debt ratings on the U.S. and the U.K.
- German chancellor Merkel said healthier members of the euro zone…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(