HTZ – Hertz Global Holdings Inc. – Investors in car rental company Hertz Global Holdings Inc. are taking it on the chin today, with shares in the name sliding as much as 13% in the early going to a three-month low of $22.47. Shares fell after Hertz lowered its full year 2013 earnings and revenue guidance, primarily due to weaker than expected U.S. airport car rentals, according to a press release issued by the company.
October expiry put options changing hands on the stock this morning indicates one or more traders are bracing for shares in the name to weaken further in the near term. Around 2,000 of the Oct $23 strike puts appear to have been purchased, most of the contracts at a premium of $1.00 each. Put buyers make money at expiration next month if shares in HTZ decline 2.0% from today’s low of $22.47 to breach the breakeven point on the downside at $22.00. Shares in Hertz last traded below $22.00 in April.
CAG – ConAgra Foods, Inc. – Shares in the provider of Chef Boyardee, Hunt’s and other branded consumer food products are in negative territory on Thursday morning, off 0.25% at $30.37 as of 10:45 a.m. ET. The stock has been hit hard in recent weeks, currently down more than 18% from a multi-year high of $37.28 reached at the beginning of August.
Trading in ConAgra call options this morning, however, suggests some strategists may be positioning for the price of the underlying to rebound during the final months of 2013. The most traded options contracts on CAG thus far in the session are the Dec $32 strike calls, with volume topping 5,500 contracts versus open interest of 1,615 contracts. Time and sales data suggests most of the volume was purchased within 15 minutes of the opening bell at a premium of $0.55 each. Call buyers may profit at December expiration in the event that ConAgra’s shares rally 7.0% over the current price of $30.28 to exceed the breakeven point at $32.55.
CAG - ConAgra Foods, Inc. – Options on food products company, ConAgra Foods, Inc., are more active than usual this morning after the provider of Snack Packs, Slim Jims and Hebrew National hot dogs boosted its quarterly dividend and raised its full-year earnings forecast. Shares in CAG rallied more than 8% this morning to a multi-year high of $27.75. Traders positioning for shares in the name to extend gains in the near term snapped up call options in the September and October expiries. Overall volume in ConAgra options today is above 12,400 contracts as of 12:00 p.m. ET; heavy activity for the name, which typically sees average daily options volume of 598 contracts. Upside call buying in contracts with just one full trading day remaining to expiration indicate some strategists anticipate a strong end to the week for ConAgra shares. Traders appear to be buying most of the volume in the Sep. $27 and $28 strikes this morning at average premiums of $0.27 and $0.05 apiece. Thus far in the session, these contracts have traded more than 1,600 times each. Fresh interest in the Oct. $28 strike call, where 1,400 contracts changed this morning versus zero open positions, appears to have been largely initiated by buyers paying an average premium of $0.20 per contract. Traders long the calls profit at expiration next month as long as shares in ConAgra rally another 3% over the current price of $27.35 to top the average breakeven point at $28.20.
NSC - Norfolk Southern Corp.– Rail transportation services provider, Norfolk Southern Corp., said Wednesday third-quarter earnings are likely to trail analyst estimates, sending the price of its shares down nearly 10% this morning to $65.58. At least one options trader is positioned for the shares to come off further. It looks like the strategist purchased a 2,000-lot Oct. $60/$65 bear put spread at an average net premium outlay of $0.65 per contract. The…
DELL - Dell, Inc. – Strategists populating Dell options today are sending mixed signals on the PC maker ahead of the company’s first-quarter earnings report on May 17. Call buyers in the June contract appear to be gearing up for a rally in the price of the underlying shares, while ratio put spreaders are taking a more cautious stance on the stock. Shares in Dell are currently up 0.25% to stand at $15.84 as of 12:15pm. Options traders exchanged more than 9,800 calls at the June $16 strike on open interest of 3,774 contracts. It looks like nearly all of the contracts were purchased for an average premium of $0.63 a-pop. Investors long the calls profit if DELL’s shares rally 5.0% over the current price of $15.84 to exceed the average breakeven price of $16.63 by expiration day next month. Meanwhile, one or more put players initiated ratio spreads. Approximately 3,500 in-the-money puts at the June $16 strike were purchased for an average premium of $0.81 each, while 7,000 puts at the lower June $15 strike sold for an average premium of $0.37 apiece. Investors employing the spreads paid a net premium of $0.07 per contract, on average. The sale of twice as many of the lower-strike put options substantially reduced the cost of positioning for a pullback in Dell’s shares through expiration day next month. Traders may be using the put-play to hedge a long position in the stock, or may be positioning for shares to decline rather than rally as call buyers’ actions suggest. The parameters of the put spread, for outright bearish players, indicate maximum potential profits of $0.93 per contract if shares in DELL settle at $15.00 at expiration. But, if the position turns out to be not quite bearish enough, investors start losing money beneath a breakeven share price of $14.07.…
MOT – Motorola, Inc. – Shares of the maker of the Droid smartphone fell in morning trading but recovered during the session to add as much as 3 pennies or 0.35% to arrive at an intraday-high of $8.39 this afternoon. Motorola appeared on our ‘most active by options volume’ market scanner today after one options player appears to have booked profits on a previously established bullish position. It looks like the investor originally purchased roughly 28,000 calls at the September $7.0 strike for an average premium of $0.70 each back on August 19, 2010, when MOT shares were trading at a volume-weighted average price of $7.55. The appreciation in the price of the underling since the calls were purchased lifted premium on the September $7.0 strike calls, allowing the trader to sell the contracts for $1.35 in premium apiece today. Net profits on the transaction amount to $0.65 per contract. Next, it looks like the bullish player re-opened, or rolled, the position to the higher October $8.0 strike where approximately 28,000 calls were picked up at an average premium of $0.10 a-pop. The investor starts to make money on the fresh batch of calls if Motorola’s shares surge 8.5% over the current price of $8.39 to surpass the effective breakeven price of $9.10 by expiration. We note that the investor may walk away with profits on the new long call position before October expiration if circumstances going forward lift the premium on those calls and the trader opts to sell the position at an advantageous price.
RIMM – Research in Motion Ltd. – Options on the Blackberry maker are a hot ticket item today ahead of the firm’s second-quarter earnings report scheduled for release after the closing bell this afternoon. Frenzied trading ensued right out of the gate this morning with investors heavily trafficking in September and October contract call and put options. Shares are currently up 1.1% at $46.02 as of 1:45 pm ET, but earlier rallied as much as 2.3% to reign in an intraday high of $46.58. The overall reading of options implied volatility on the stock increased 5.1% in the first half of the session to top out at 58.22%, but has come off to stand just 2.6% higher on the day at 56.82%. Although more than 1.7 call options changed hands for each single put on…
RIMM – Research in Motion Limited – Blackberry maker, Research in Motion, revealed a distribution deal with Digital China – a unit of Legend Holdings – aimed at expanding its business in China. Shares stood 2.5% higher to $60.22 thirty minutes before the closing bell. One option investor banked profits on a previously established call position in the January 2010 contract today. It appears the trader originally purchased 25,000 calls at the January 80 strike for 30 cents apiece on December 4, 2009. Today the investor shed all 25,000 lots for 43 cents each. Net profits on the closing sale amount to 13 cents per contract for total gains of $325,000. Option implied volatility on the stock is up slightly on the day to 59.91%.
BAC – Bank of America Corp. – A bearish risk reversal on Bank of America this afternoon suggests one investor expects shares to suffer significant declines by expiration in May 2010. BAC’s shares slipped 2% to $15.98 in late-day trading. It appears the pessimistic player shed 7,500 calls at the May 22 strike for 36 cents apiece in order to partially offset the cost of buying the same number of put options at the lower May 13 strike for 70 cents premium each. The net cost of the transaction amounts to 34 cents per contract. The effective breakeven point on the put options of $12.66 is 20.77% lower than the current price per BAC share. The investor responsible for the reversal could be taking an extremely bearish bet on Bank of America. If this is the case, the investor expects shares to nosedive down to lows experienced at the end of July 2009. Alternatively, the trader could be long the stock, and financing cheap downside protection by selling covered call options. The long puts serve as protection in case the stock tumbles, whereas the short calls suggest the investor is happy to have the underlying stock position called from him at $22.00 each. Shares of BAC would need to rally 38% from the current price in order for the March 22 strike calls to land in-the-money.
VZ – Verizon Communications, Inc. – Option traders displayed mixed near-term sentiment on the communications company this afternoon. Shares edged 2% higher to a new 52-week high of $33.36 with less than one hour remaining in the…
As elderly people get older they tend toward feeble-mindedness. Not in every case, of course, but as a general rule applicable to any given cohort. I am acutely aware of this tendency whenever I express an opinion or explain a conclusion: I may simply be losing my grip. Moreover, older people tend to become stuck in their ways. So they may often fail to see how the world is changing, not to mention why it ...
Note: The charts in this commentary have been updated to include the Q2 2016 Advance Estimate.
The chart below is a way to visualize real GDP change since 2007. It uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics:
The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE) and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which ...
By Jacob Wolinsky. Originally published at ValueWalk.
NetSuite Inc (NYSE:N) is soaring this morning as Oracle Corporation (NASDAQ:ORCL) has made a bid to buy the company for $9.3 billion. This deal has been rumored for some time but obviously few expected such a large premium or did not think the bid was certaintly coming as the stock is up about 18 percent at the time of this writing which is a lot for a tech giant. Here is what the sell side is saying.
NetSuite – analysts react
Should the transaction take place, Oracle would pay about 9x NTM EV / revenue (based on consensus estimates for NetSuite), above the average multiple paid in our precedent SaaS Software acquisitions analysis of 6.8x . Additionally, Oracl...
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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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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.
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