Posts Tagged ‘DAL’

Delta Call Options In Play As Shares Rally

Delta Air Lines Inc. (Ticker: DAL) shares are up more than 3.0% as of 1:00 pm ET to stand at $40.00 amid a strong up-day for U.S. equities and a fresh record high for the S&P 500 Index. Options traders positioning for the price of Delta shares to continue higher during the month of July appear to be picking up calls on the stock today.
It looks like some traders are buying up the 25Jul’14 41.5 strike call options, with upwards of 6,900 contracts in play thus far in the session against open interest of 110 contracts. Time and sales data suggests most of the volume was purchased at an average premium of $0.74 each. Buyers of the 41.5 strike calls stand ready to profit at expiration in four weeks in the event that DAL shares rise another 6.0% to exceed the average breakeven price of $42.24. Delta Air Lines reports second-quarter earnings ahead of the opening bell on July 23rd.


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Air Carrier Options Active As Shares Lose Altitude

A second consecutive down day for shares in airline stocks spurred heavy trading traffic in options across the largest market-cap names, including United Continental Holdings, Inc. (Ticker: UAL), Delta Air Lines, Inc. (Ticker: DAL), American Airlines Inc. (Ticker: AAL), and JetBlue Airways Corporation (Ticker: JBLU). Shares in these air carriers are down roughly 6.0%, 5.0%, 5.5% and 4.0%, respectively, as of the time of this writing amid higher oil prices and in the wake of Lufthansa’s cut to its 2014 profit guidance on Wednesday.

Options on American Airlines and Delta Air Lines are seeing the most volume overall with more than 55,000 contracts traded on each, while JetBlue is experiencing the highest volume relative to its average daily options volume. Volume in JBLU options is nearing 40,000 contracts just before midday in New York, which is approximately four times its average daily reading of around 9,200 contracts.

Meanwhile, smaller air carrier, Hawaiian Holdings, Inc. (Ticker: HA), Hawaii’s biggest and longest-serving airline, with a market cap of around $816 million (vs. roughly $33 billion market-cap for Delta Air Lines and $29 billion for American Airlines), also attracted heavier than usual options activity. Upwards of 4,100 contracts have changed hands on Hawaiian Holdings as of 11:30 am ET, which compares to average daily volume for the stock of around 640 contracts. Shares in HA are down 3.5% on the session at $14.65 as of the time of this writing. Hawaiian shares on Monday of this week traded up to a record high of $16.49. 

As the chart below shows, shares in the air carriers mentioned have lost some altitude lately, but the stocks are still up, in some cases significantly, for the most recent six month period.

Chart – Six-month chart of AAL, DAL, UAL, JBLU & HA


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Sizable Call Spread Constructed On Delta Air Lines

DAL – Delta Air Lines, Inc. – Shares in Delta are losing altitude on Friday, down 1.3% to $23.70 during the first half of the session. 

A sizable call spread initiated on the stock this morning indicates one options market participant is positioning for the price of the underlying to rally sharply heading into the New Year. It looks like the strategist purchased a 5,000-lot Jan 2014 $27/$30 call spread for a net premium of $0.48 per contract. The position makes money if shares in DAL rally 16% over the current price of $23.70 to exceed the breakeven point at $27.48. Maximum potential profits of $2.52 per contract are available on the spread in the event that Delta’s shares jump more than 25% to hit $30.00 by expiration next year. Delta’s shares are up 160% since this time last year.

YHOO – Yahoo! Inc. – Weekly call options changing hands on Yahoo today look for shares in the Internet media company to extend gains during the next five trading sessions. Shares in the name are moving higher for a fourth straight day, having rallied 12% since the close on Monday to touch a multi-year high of $33.85 this morning.

Options traders positioning for the price of the underlying to continue moving higher next week appear to be buying Oct 04 ’13 expiry calls across multiple striking prices. The most traded Oct 04 ’13 contracts by volume are the $35 strike call options, with roughly 4,500 calls exchanged during the first two hours of the session against open interest of 395 contracts. Time and sales data suggests most of the volume was purchased for an average premium of $0.25 each. The weekly calls may be profitable at expiration if YHOO shares increase 4.0% over today’s high of $33.85 to exceed the breakeven point at $35.25. 


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Vera Bradley Call Options Active

VRA – Vera Bradley, Inc. – A sizable trade in Vera Bradley call options today appears to be bullish on shares of the handbags and accessories retailer through November expiration. Shares in VRA, down roughly 20% since this time last year, slipped 2.4% to a fresh 52-week low of $18.67 today. The company reports second-quarter earnings after the close on Wednesday.

The most-traded contracts are the Nov $20 calls, with volume topping 3,400 contracts versus open interest of 505 contracts. Most of the volume traded in a block of 1,900 calls at an asking premium of $1.20 per contract. The position starts making money if shares in Vera Bradley rally 13% over today’s low of $18.67 to exceed the breakeven point at $21.20. Overall options volume of around 5,100 contracts traded on the stock today is more than 10 times VRA’s average daily volume of approximately 470 contracts. 

LULU – Lululemon Athletica, Inc. – Shares in the maker of yoga and athletic apparel are on the rise today, up as much as 4.6% during the session to $72.71 after the stock was initiated with a ‘Buy’ rating and price target of $90.00 at Citigroup. The retailer reports second-quarter earnings ahead of the opening bell on Thursday.

The stock attracted heavy volume in put options, with the put/call ratio dancing near 2.2 as of the time of this writing. Overall options volume on LULU is above 18,600 contracts just before 3:00 p.m. ET, roughly twice the stock’s average daily options volume of around 9,300 contracts. Some options traders appear to be bracing for the price of the underlying to pull back after earnings. Roughly 2,000 of the Sep 13 ’13 $72.5 strike weekly puts…
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Put Action Portends Potential Pullback In Delta Air Lines

 

Today’s tickers: DAL, GES & AGU

DAL - Delta Air Lines, Inc. – Options on the Atlanta, Georgia-based airline were among the most actively traded as measured by volume this morning after a large block of bearish puts changed hands in the first hour of the trading session. Shares in Delta Air Lines are sliding on a down day for the broader market, trading 4.0% lower at $9.15 as of 12:10 p.m. ET. Volume in Delta options was heaviest at the Dec. $8.0 strike, where upwards of 11,500 puts traded against previously existing open interest of 3,299 contracts. It looks like 9,110 of the $8.0 strike puts traded in a block and appear to have been purchased along with the remainder of the overall volume at a premium of $0.48 per contract. The sizable stake in DAL puts may represent outright bearish positioning on the airline through the end of the calendar year, or could be a hedge to protect the value of an existing position in the underlying shares. Profits, or downside protection, kick in if shares in Delta plunge 18% from the current price of $9.15 to breach the effective breakeven point at $7.52 by December expiration. Shares in Delta Air Lines, Inc. last traded below $7.52 in November 2011.

GES - Guess?, Inc. – Bulls buying front-month calls on Wednesday afternoon ahead of Guess, Inc.’s second-quarter earnings report were crushed today after the retailer revealed declining same-store sales and lowered estimates for full-year earnings and revenue. Shares in Guess reacted to the disappointing report by dropping 20% to an intraday low of $26.73. The largest increase in September expiration call option open interest overnight was in the $36 strike contracts, which rose by 904 lots to 1,406 contracts. A review of time and sales from Wednesday afternoon shows the purchase of approximately 850 of the Sep. $35 calls for a premium of $0.95 apiece just after 12:20 p.m. ET. Less than 24…
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Which Way Wednesday – $3.5Tn Not Enough to Prop up Markets?

SPY WEEKLYUh-oh!

Wasn't it just 2 days ago that the EU was all set to pop the ESM to $1.25Tn and the IMF was going to add another Trillion and the Fed was talking about more QE in the $1.25Tn range, which plunged the Dollar to multi-week lows?  Shouldn't adding 6% of the entire planet's GDP in additional stimulus give us more than a one-day pop in the markets? 

As I pointed out in Monday's Morning Alert to Members – these are all just RUMORS and my conclusion in the Alert was: 

Despite the bullish turn of events (which we anticipated last week) we're more inclined to cash out our bullish trades into the excitement and press our bear bets and TOMORROW, if we're still over our levels – THEN we will scramble to add some aggressive bullish trades to our virtual portfolios.  Again, I cannot stress enough that CASH is my preferred position because this market is tough to call and you need to be very flexible and very nimble to trade it.

SPY 5 MINUTEWe proceeded as planned and, so far, we haven't had any reason to capitulate and get more bullish and that is both surprising and disappointing as this is the end of the first quarter of 2012 – if not now – when?  As David Fry notes

Monday’s rally was typical as we head toward the end of the quarter. Hedge fund performance fees are on the line and any way to boost these profits is job one. Top holdings for hedge funds include the usual suspects: AAPL, IBM, INTC, BAC, DIS, HD etc.

With little volume it’s easy for algos and hedge funds to prop stocks on little hard news. Tuesday we briefly saw more of this. Just as markets were weakening a story appeared using the Fed’s favorite oracle, the WSJ, as Fed governor Rosengren stated, “more stimulus is on the table”. Immediately HFT algos jumped and markets rose if only briefly. 

It's very exciting for us as PLCN (see Thursday's notes) went all the way up to $736 on Monday and sold off on some pretty heavy trading yesterday.  Slowly but surely, our negative premise is beginning to take shape as Piper Jaffray is finally catching up with us and noting "a sharp decline in unique visitors to Priceline's booking.com" from growth of 61 percent during the…
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Options Traders Tackle Research In Motion

Today’s tickers: RIMM, RRR, HNR & DAL

RIMM - Research in Motion, Ltd. – Bruised, battered and beaten-down does not adequately describe how shares in RIMM look these days, particularly today after the company revealed fourth-quarter sales and earnings guidance that missed expectations, and said the new generation of Blackberrys will launch later than it had anticipated. Shares in the Research in Motion opened the session down 13.3% at an eight-year low of $13.12. The stock this year has lost more than 80.0% of its value this year, having come down from a February 18, 2011, 52-week high of $70.54. Options volume on the stock is just about to top 400,000 contracts as of 1:00 PM in New York, making it the most actively traded single-stock name by options volume today. Puts on the Blackberry maker are changing hands roughly 1.8 times for each single call option in action today. Trading in weekly options set to expire next Friday suggest some traders expect the price of the underlying to slump to fresh lows during the next five trading sessions. Bearish positions accumulated at the Dec. ’23 $14 strike, where more than 4,500 in-the-money puts changed hands against 1,082 open positions. It looks like most of the puts were purchased for an average premium of $0.83 each. Traders eyeing continued near-term weakness snapped up around 2,000 puts at the lower Dec. ’23 $13 strike at an average premium of $0.35 a-pop. Investors long the $13 strike puts may profit at expiration in the event that RIMM’s shares slip beneath the average breakeven point at $12.65. Call sellers also made an appearance in the weekly options, selling roughly 2,000 contracts at the Dec. ’23 $13 strike to pocket an average premium of $0.84 apiece. Investors selling the call options may walk away with the full amount of premium in hand as long as shares settle below $13.00 at expiration.…
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Bearish Player Strangles Visa, Inc.

 Today’s tickers: V, ABC, HTHT & DAL

V - Visa, Inc. – The credit card issuer and global electronic payment services provider popped up on our scanners this morning after one bearish options strategist sold a strangle in the January 2011 contract. It looks like the investor responsible for the transaction sees Visa’s shares slipping lower, while still trading within a certain range through expiration next month. Shares in Visa were down less than 1.25% around the time the strangle was put on, but have since plunged more than 4.00% to $77.39 as of 12:55pm in New York. As of midday, it looks like this trader’s directional play enhanced with the sale of a strangle, is now working in his favor. The strangle-strategist sold 2,100 calls at the January 2011 $85 strike for a premium of $1.02 each, and sold the same number of puts at the January 2011 $65 strike at a premium of $0.23 apiece. Gross premium pocketed on the transaction amounts to $1.25 per contract. The strangle was tied to the sale of 42,000 shares of the underlying stock at $79.60 each, which makes sense given the 0.20 delta on the calls. The investor keeps the full premium on the trade as long as shares trade within the boundaries of the strike prices described through January 2011 expiration. The short stance in shares is a sign this individual expects Visa’s shares to fall over the next several weeks, while the sale of the Jan. 2011 $65 strike puts indicates that he does not see shares collapsing more than 15% to a new 52-week low. As with any short strangle, the investor may absorb losses if shares move against him. Losses on the strangle start to accumulate if Visa’s shares rally above the upper breakeven price of $86.25, or should shares slip beneath the lower breakeven point at $63.75, ahead of January expiration day. In hindsight, the strangle was nicely timed. Selling the same Jan. 2011 $65/$85 strangle now yields gross premium of $0.95 per contract versus the far richer $1.25 per contract enjoyed by this early-bird investor.…
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Herbalife Optimist Secures Insurance Policy Ahead of Earnings

Today’s tickers: HLF, REE, XLB, BIDU, DAL, RSH & MOT

HLF - Herbalife, Ltd. – It looks like one cautiously optimistic options trader initiated a delta neutral hedge on the maker of weight management, nutritional supplement and personal care products this afternoon ahead of the firm’s third-quarter earnings announcement scheduled for release after the close on November 1, 2010. Herbalife’s shares are currently down 1.25% to stand at $63.20 as of 3:45 p.m. in New York trading. The investor appears to have picked up 58,000 Herbalife shares at a price of $63.76 each as well as 2,000 calls on a 0.29 delta for a premium of $1.45 per contract. The long stance taken in HLF shares suggests the trader is bullish on the stock and expecting shares to climb higher. But, the put options serve as downside protection in case the investor’s inclinations fail to align with the performance of the stock going forward. The put options will be well worth the added premium if earnings are disappointing and shares head lower ahead of November expiration day.

REE - Rare Element Resources, Ltd. – The Canada-based company that was the target of bullish options trading just 24 hours ago has transformed into a hub of bearish activity. Shares in Rare Element Resources, which own the Bear Lodge mine in Wyoming, fell as much as 27.05% from yesterday’s high of $13.71 to an intraday low of $10.00. Despite the substantial decline today the current price of the stock is still up roughly 260% since August 20, 2010, when shares were around $2.80 each. Pessimistic players took to the options field on REE to place bearish bets on the stock. Investors expecting shares to continue lower picked up put options and sold call options in the November and December contracts. Traders picked up…
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Rumor Mill Sends Micron Shares Higher, Inspires Demand for Call Options

Today’s tickers: MU, REE, MEE, DAL, USB, VLTR & KR

MU - Micron Technology, Inc. – Renewed rumors that the memory chip maker could be the target of a leveraged buyout by private equity investors looking to take the company private inspired an options feeding frenzy today. Micron’s shares responded to speculative musings by rising as much as 6.30% to an intraday high of $7.76. Just before 2:00 p.m. in New York trading, one big options market participant initiated a large-volume bullish spread in the April 2011 contract. The debit call spread serves to position the trader to benefit handsomely should buyout rumors wind up having some truth to them ahead of April expiration. The options strategist picked up 21,750 calls at the April 2011 $9.0 strike for a premium of $0.71 each, and sold the same number of calls at the higher April 2011 $11 strike at a premium of $0.27 a-pop. Net premium paid for the transaction amounts to $0.44 per contract. Thus, the investor is prepared to make money should Micron’s shares surge 21.65% over today’s high of $7.76 to exceed the effective breakeven point on the spread at $9.44 by expiration day next year. The trader may pocket maximum potential profits of $1.56 per contract if the chip maker’s shares jump 41.75% to trade above $11.00 by April expiration. Investors populating Micron options during the session exchanged more than 7.1 calls on the stock for each single put in play as of 3:25 p.m. in New York. A total of 146,615 option contracts have changed hands on Micron Technology with 35 minutes to go before the closing bell.

REE - Rare Element Resources Ltd. – Shares in Rare Element Resources Ltd., which has a 100% interest in the Bear Lodge property, rallied more than 19.2% today to…
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Zero Hedge

'Bikers For Trump' Vow To Form A "Wall Of Meat" To Protect Inauguration From Protesters

Courtesy of ZeroHedge. View original post here.

In 2001, disaffected, Gore-supporting snowflakes shut down various parts of the Bush inauguration after increasingly violent crowds pelted his motorcade with eggs during his procession down Pennsylvania Avenue.  And while many have predicted a similar fate for the Trump administration this Friday with protesters already descending upon D.C. amid vows to "paralyze the city", Trump has one advantage that Bush did not, namely 5,000 "...



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ValueWalk

Ron Muhlenkamp On Bank Stocks

By VW Staff. Originally published at ValueWalk.


Discussing the current state of the markets and stock picks with Kourtney Gibson, Loop Capital, and Ron Muhlenkamp, Muhlenkamp & Co.

H/T Dataroma

Ron Muhlenkamp On Bank Stocks

Image source: CNBC Video ScreenshotRon Muhlenkamp

The post Ron Muhlenkamp On Bank Stocks appeared first on ValueWalk.

Sign up for ValueWalk's free newsletter here.

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Phil's Favorites

IMF Joins Trump Bull Parade: IMF Timing Humor

Courtesy of Mish.

After lowering US, UK, and global growth forecasts, the IMF reversed course and is now part of the Trump bull parade.

  1. July 19, 2016: IMF Cuts Global Growth Forecasts on Brexit, Warns of Risks to Outlook
  2. October 4, 2016: IMF Sees Subdued Global Growth, Warns Economic Stagnation Could Fuel Protectionist Calls
  3. January 16, 2017: ...


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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Oil prices under pressure on doubts over output cuts (Reuters)

Oil prices were under pressure on Monday due to doubts that large oil producers will reduce production as promised and on expectations that U.S. production would increase again this year.

Shenzhen Stocks Sink Most in 10 Months in Sudden Afternoon Drop (Bloomberg)

Stocks in China’s second-largest equity market plunged the most in 10 months, underscoring the increasing fragility of the nation’s financial assets.

...



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OpTrader

Swing trading portfolio - week of January 16th, 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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Chart School

Weekly Market Recap Jan 15, 2016

Courtesy of Blain.

The week that was…

Bullish action continues as the market alternates between periods of rallying with periods of quiet consolidation.  This past week was a period of the latter.  It was a relatively quiet week other than a bit of a selloff right at the open Thursday.  Friday we saw some of the major U.S. banks report. There were a lot of Federal Reserve speakers trotted out – but markets are in more of a Trump Trance right now so most of it was ignored.  Still no close on the Dow Jones Industrial Average over 20K, although that level was tickled Monday.

That said we have seen a rotation from the winners of November & December (S&P 500 + Russell 2000), into areas that lagged ...



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Digital Currencies

China's Bitcoin Exchanges Suspend Margin Trading

Courtesy of Zero Hedge

China's bitcoin traders who use the most popular bitcoin exchange not only in China, but also the entire world, BTCChina, were met with an unexpected warning on Friday:

Starting from January 12th, 2017, BTCChina has suspended margin loan service. If you have any questions, please contact Customer Service: support@btcc.com.

BTCChina, which commands over 37% of global bitcoin trading...

... wasn't alone.

Fo...



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Kimble Charting Solutions

Regional banks; Breakout test in play, says Joe Friday

Courtesy of Chris Kimble.

Over the past 60-days, financial stocks have done well. Over the past 60-days, regional banks have been stellar performers, out producing larger banks and the broad market, by a large percentage. From a risk on stock perspective, seeing large and regional banks do well, has historically been a positive sign.

Below looks at regional bank ETF (KRE)_

CLICK ON CHART TO ENLARGE

K...



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Members' Corner

How To Poop On A Date?

Courtesy of Nattering Naybob.

Back for a brief respite, it's "in the Toilet Thursday" or "Thursday in the Loo". Our last episode The Best Thing To Happen To Pooping, Since Your Butt, laid down a historical perspective.  

This week in How To Poop on a Date? we are graced with a delicate shituation: when your finally back at her place, snuggling in for a little "brown chicken brown cow" and you get hit with "Love Potion #2".  Oh what to do...


...

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Mapping The Market

If we try it enough, it will work.

Via Jean-Luc

Brownback wants Trump to emulate what he did in Kansas because it worked so well:

Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

By RICHARD RUBIN and  WILL CONNORS

Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...

...

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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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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come 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:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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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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