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Posts Tagged ‘DFS’

Pfizer Calls Look For Shares To Extend Rally

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Today’s tickers: PFE, DFS & TSL

PFE - Pfizer, Inc. – Shares in the world’s largest drug maker are up sharply on Tuesday, trading 3% higher on the session at $27.65 as of 11:10 a.m. ET, the highest level in more than five years. Pfizer’s shares are rallying after the company posted better-than-expected fourth-quarter earnings ahead of the opening bell and forecast2013 earnings above analyst estimates. The stock has gained more than 17.5% since mid-November. Heavy trading traffic in Pfizer call options this morning suggests traders are positioning for shares in the name to extend gains during the next couple of months. February expiry calls are changing hands at a clip, with notable volume exceeding open interest at the Feb. $28 strike price. Most of the Feb. $28 calls in play appear to have been purchased for an average premium of $0.08 each. Meanwhile, the single-largest print in PFE call options, a block of 24,500 contracts, traded at the Mar. $28 striking price. It looks like one strategist purchased the call options at a premium of $0.17 each during the first 20 minutes of the trading day. Overall call volume at the Mar. $28 strike exceeds 28,500 contracts as of 11:30 a.m. ET, trumping open interest of 9,870 contracts. Traders long the upside calls stand ready to profit at March expiration should Pfizer’s shares increase another 2.0% to surpass the breakeven point at $28.17.

DFS - Discover Financial Services, Inc. – Bearish options on credit card issuer and electronic payment services provider, Discover Financial Services, are active this morning with shares in the name trading 0.5% lower on the session at $37.87 as of 11:35 a.m. ET. March expiry put options are the most actively traded contracts on Discover today, with upwards of 9,400 lots in play at the $37 strike versus open interest of just 33 contracts. It looks like one or more traders purchased the bulk of the volume for an average premium of $0.91 each. Put buyers may profit at expiration in six weeks in the event that shares in DFS slump nearly…
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Bulls Find Lululemon Call Options Irresistible as Shares Soar

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Today’s tickers: LULU, IRM, GAP, SNDK, STI & DFS

LULU - Lululemon Athletica, Inc. – Shares of the yoga clothing and accessories maker stretched and lengthened up to new all-time highs yet again today, attracting bullish options players more than willing to flex their call-buying muscles in the December and January 2011 contracts. LULU’s shares jumped more than 8.95% to secure an intraday- and new all-time high of $69.25 in the final thirty minutes of the trading week. The Canadian company’s shares have been unstoppable, rallying an incredible 167.5% to today’s high from a 52-week low of $25.75 on February 5, 2010. Shares are up 1,490.8% since March 6, 2009, when the stock touched down at an all time low of $4.33 a share at around the same time the S&P 500 Index hit rock-bottom in the most recent economic recession. Investors unwilling to stand in the way of such a driving force picked up call options on Lululemon to position for additional share price gains going forward. Traders purchased some 1,100 in-the-money calls at the December $65 strike for an average premium of $2.67 each. Call buyers at this strike profit if LULU’s shares exceed the average breakeven price of $67.67 through December expiration. Other bullish players sold roughly 1,650 puts at the December $65 strike to pocket premium of $1.08 per contract. Put sellers keep the full premium received on the transaction as long as shares trade above $65.00 through expiration in one week. Investors short the puts are happy to have shares of the underlying stock put to them at an average price of $63.92 a share in the event that the puts land in-the-money at expiration. Bullish players skipped to the January 2011 contract to purchase out-of-the-money calls, as well. Investors bought more than 1,000 January 2011 $70 strike calls for an average premium of $2.21 each. Uber-bullish players picked up another 2,000 calls at the higher January 2011 $75 strike at an average premium of $1.19 a-pop. Call…
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Bullish Smoke Signals Detected at Human Genome Sciences

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Today’s tickers: HGSI, BSX, DFS, CSCO, LVLT, AMGN & IBB

HGSI - Human Genome Sciences, Inc. – Shares in Human Genome Sciences are up 8.9% to trade around $26.49 in the final hour of the trading session on speculation the firm could become an attractive takeover target if its lupus drug treatment, Benlysta, wins approval next month. Options traders sent up a number of bullish signals using January 2011 contract call and put options. Earlier this morning, one optimistic investor initiated a debit call spread, buying 3,000 calls at the January 2011 $27 strike for a premium of $3.90 each, and selling the same number of calls at the higher January 2011 $40 strike at a premium of $0.375 apiece. The net cost of putting on the spread amounts to $3.525 per contract. The investor makes money on the spread if Human Genome’s shares surge 15.2% over the current price of $26.49 to exceed the effective breakeven point at $30.525 by January expiration. The call spreader could end up taking home maximum potential profits of $9.475 per contract if the price of the underlying stock jumps 51.0% to trade above $40.00 by expiration day next year. The trader is well positioned to benefit from the rally in HGSI shares that would accompany Benlysta’s approval and/or continued takeover chatter. Another bullish sign that appeared in the same expiry involved put options. It looks like another investor unraveled a previously established bear put spread, selling 2,750 puts at the Jan. 2011 $20 strike and buying the same number of puts at the lower Jan. 2011 $15 strike, to take in a net premium of $1.25 per contract. It is possible the transaction is an opening credit put spread rather than a closing sale, but open interest levels at both strikes are more than sufficient to cover today’s volume. Either way, the trade is another sign of optimism on the biotechnology company ahead of the key drug approval decision. Options implied volatility on the stock is…
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Bullish Players Frequent Las Vegas Sands as Shares Continue to Hit New 52-Week Highs

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 Today’s tickers: LVS, INTC, DFS, BIG, SWN, MRVL, XRT & FTNT

LVS - Las Vegas Sands Corp. – Shares of the casino resort operator rallied as much as 3.5% during the trading session to hit an intraday- and new 52-week high of $47.48 on news Macau casino revenue, bolstered by China’s Golden Week holiday, jumped 50% to a record in October. Analysts at Morgan Stanley raised their target price on LVS to $50.00 from $36.00, maintained an ‘overweight’ rating on the stock, upped their EPS estimate on the company for fiscal 2010 to $0.96 a share from $0.69 a share, and increased their EPS forecast for 2011 for LVS to $1.85 per share from $1.19 per share. Options traders are initiating bullish positions on the casino operator today and are currently trading more than 2.2 calls on the stock for each single put option changing hands. Near-term November contract calls and puts are the most popular with less than 30 minutes remaining before the final bell. Bulls sold more than 1,000 puts at the November $45 and $47 strikes to pocket an average premium of $1.23 and $2.10, respectively. Investors short the puts keep the premium received as long as shares exceed the strike prices described by November expiration. Meanwhile, call buyers scooped up 1,600 in-the-money contracts at the November $46 strike for an average premium of $2.63 each. Another 1,100 calls were purchased at the higher November $47 strike for an average premium of $2.14 a-pop. Investors hoping to see LVS shares increase significantly before the year ends purchased some 1,800 calls up at the December $50 strike for an average premium of $2.24 per contract. Traders holding these contracts profit if Las Vegas Sands’ shares surge 10.00% over today’s high of $47.48 to trade above the effective breakeven price of $52.24 by expiration day next month. Options implied volatility on LVS is up 5.7% to arrive at 50.30% as of 3:40 pm in New York trading.

INTC - Intel Corp. – One big options…
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Investors HOG-Wild for Harley-Davidson, Inc. Options

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Today’s tickers: HOG, SKS, MDRX, DFS, NFLX, IGT & DOW

HOG – Harley-Davidson, Inc. – Motorcycle maker, Harley-Davidson, Inc., attracted hoards of options investors during the session with its shares rallying as much as 5.85% in morning trading to secure an intraday high of $27.71. Harley’s shares are currently up a more modest 1.80% to $26.65 just before 12:40 pm (ET). Bullish tactics dominated activity in the June contract, with optimistic traders picking up some 4,300 calls at the June $28 strike for an average premium of $0.52 apiece. Call buyers at this strike price make money only if Harley-Davidson’s shares exceed $28.52 ahead of June expiration. Optimism spread to the higher June $30 strike where 1,100 calls were purchased at an average premium of $0.15 each. The calls are not a profitable acquisition for traders unless Harley’s shares jump more than 13.1% over the current price of $26.65 to exceed the average breakeven price of $30.15 by June expiration day. Investor sentiment is mixed in the July contract. While bulls purchased call options at the July $30 strike for an average premium of $0.82 apiece, bearish traders employed different strategies. It looks like some pessimistic investors essentially opted to sell call options in order to finance the purchase of debit put spreads. These traders appear to have purchased roughly 4,000 puts at the July $25 strike for an average premium of $1.23 each, and sold about the same number of puts at the lower July $20 strike for $0.23 apiece. Additional financing for the bearish spread was provided by the sale of approximately 4,000 calls at the July $30 strike for an average premium of $0.82 each. Thus, the average net cost of the combination play amounts to $0.18 per contract. Investors employing this strategy are prepared to profit should HOG’s shares decline 6.9% to breach the effective breakeven price to the downside at $24.82 by July expiration. Maximum available profits of $4.82 per contract accumulate for bearish individuals if shares of the underlying stock plummet 24.95% from the current price of $26.65 to break through $20.00 by expiration day.

SKS – Saks, Inc. – Some investors made bullish moves on Saks, Inc. today with shares of the underlying stock up as much as 5.2% in the first half of the trading session to an intraday high of $8.50. The luxury retailer’s share price rose on optimism consumer spending…
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MetroPCS Options Calendar Spread at Play as Shares Rally

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Today’s tickers: PCS, EEM, GIGM, AIG, DFS, GE, PBR & HGSI

PCS – The wireless communications provider has experienced a more than 4.5% rally in shares today, attracting bullish option traders to the field. One trade in particular caught our eye as an investor looking for significant gains in the price of the stock took action. The purchase of 3,600 calls at the nearly in-the-money August 12.5 strike price for 1.05 was the first leg of the optimistic trade. The call options in the August contract were spread against the sale of another 3,600 calls at the higher 17.5 strike price in the February 2010 contract for 55 cents apiece. The net cost of the calendar spread amounts to 50 cents. If the nearer-term calls land in-the-money, the investor can exercise his right to take delivery of the underlying shares at an effective cost of $13.00 each. Once he is long the stock, the investor is hoping to see shares rise to $17.50 by expiration in February. If shares can rally through the 17.5 strike price, the trader will make his exit by having the underlying stock called away from him, exiting the pitch with gains of 35% in total. – MetroPCS Communications, Inc.

EEM – Options action on the emerging markets fund today suggests mixed opinions by traders populating the nearer-term contracts. Shares of EEM have slipped 1% to stand at $31.55. One bearish investor looked to the August 30 strike price to initiate a sold straddle. Such positioning indicates that the trader expects shares to continue downward and settle at $30.00 by expiration. The straddle was enacted through the sale of 7,500 puts and an equal number of calls for a gross premium of 3.93 per contract. The full premium will remain pocketed by the investor responsible for the trade if the price of the underlying gravitates to $30.00. The short call and put positions leaves this individual exposed to losses beneath the breakeven point to the downside at $26.07 and vulnerable to unlimited losses above the breakeven point to the upside at $33.93. Another investor has lessened his bearish outlook on the EEM by initiating a calendar spread. It appears that this trader sold 20,000 puts at the August 27 strike price for 52 cents apiece to fund the purchase of 20,000 puts at the much lower September 22 strike for 26 cents per contract.
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Lights back on in Vegas

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Today’s tickers: MGM, DFS, MOS, WFR, LVS, XHB, KFT & HNZ

MGM MGM Mirage, Inc. – Shares of the biggest casino owner on the Las Vegas Strip have skyrocketed by more than 42% to $13.41 amid reports from the company that occupancy has recovered and convention cancellations have lessened. More than 112,000 option contracts on the stock traded today with a number of bullish plays by investors looking for continued strength in its share price. The company also received an upgrade by – surprise, surprise – Bank of America/Merrill Lynch to ‘buy’ after also upgrading fellow casino giant, Las Vegas Sands Corp., as well. Early bird investors were able to buy call options that have since landed in-the-money during the rally at the May 12.5 strike price for an average premium of just 83 cents. Now (post 2pm EST) getting long of those same calls cost 1.75 apiece. More optimistic traders looked to the May 15 strike where more than 8,000 calls were traded. At least 3,000 of those calls were purchased for about 38 cents each earlier today. However, the premium has since increased to the current ask price of 65 cents. Option implied volatility on the stock is currently at 150% down from 200% recorded last Thursday.

DFS Discover Financial Services – The credit card issuer and electronic payment services firm is up by less than 1% to $9.02. Option investors were observed buying bullish call options on the stock despite concerns over weaker earnings for the first-quarter across the board for credit card issuers. At the May 10 strike price traders exchanged calls about 15,000 times with more than 8,300 contracts bought at an average premium of 24 cents each. Optimism spread to the June contract where about 3,400 puts were shed at the June 7.5 strike for a VWAP of 43 cents. The June 10 strike witnessed the purchase of 3,500 calls for about 72 cents apiece. The most bullish individuals discovered calls available for the taking at the July 12.5 strike price where some 1,100 were coveted for 33 cents per contract. The more than 29,900 contracts traded on the stock today represent 54% of the existing open interest on DFS of 55,244 lots.

MOS The Mosaic Company – The producer of potash and animal feed has experienced a rally in shares of more than 4% to $46.04 amid rumors reported by one news…
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Zero Hedge

Mapping Income Mobility: The Best (And Worst) Places To Grow Up

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A new study from Harvard economists Raj Chetty and Nathaniel Hendren seeks to quantify the financial impact of where America's children are brought up. More specifically, Chetty and Hendren measure "the percentage earnings gain from growing up in each county [in America] relative to an average place for children in low-income families." 

The goal of the study (and its predecessors) is to determine the most effective way to imporove economic outcomes for low-income children. Here, the researchers "focus on families who moved across areas to study how neighborhoods affect upward mobility." Unsurprisingly, Chetty and Hendren "find that every year of exposure to a bett...



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Phil's Favorites

The Greatest Trick the Devil Ever Pulled

The Greatest Trick the Devil Ever Pulled

Courtesy of Joshua M Brown

…was convincing investors that volatility and risk were the same thing.

This idea that risk cannot truly be measured by looking at volatility (as measured by standard deviation) is well-trod territory in the financial blogosphere so I won’t go into it at length again.

But I do feel as though more than half of all the terrible products, funds and newsletters available to investors make their living by confusing (conflating?) risk and volatility. It’s how Wall Street makes a lot of its money on the wealth management side (upside without fluctuation!) and its why the hedge fund industry is a $3 trillion behemoth (we&rsquo...



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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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Kimble Charting Solutions

Is the Fed losing control of interest rates?

Courtesy of Chris Kimble.

Is the Fed losing control over interest rates? I’ve heard a rumor that the Fed is in control of interest rates.

If this is true, is Janet raising rates and not telling anyone? The table below looks at the performance of the yields on the 10 & 30-year notes and TLT over the past 90-days. As you can see yields are up nearly 20% in 90 days!

CLICK ON CHART TO ENLARGE

If Janet and the Fed aren’t raising rates right now, is it possible that “Billions of Free Thinking People” are causing rates to move higher?

The chart below takes a look a...



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Insider Scoop

Goldman Sachs Initiates Titan International With Neutral

Courtesy of Benzinga.

Related TWI Earnings Scheduled For February 26, 2015 Top Performing Industries For February 3, 2015 Can the Rally in Titan International (TWI) Shares Continue? - Tale of the Tape (Zacks)

Analysts at Goldman Sachs initiated coverage on Titan International Inc (NYSE: TWI) with a Neutral rating.

The target price for Titan International is set to $...



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Chart School

ADP Employment Report for April Disappoints Expectations

Courtesy of Doug Short.

The economic mover and shaker this week is the Friday employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, probably the most publicized in the near term being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository).

Today we have the April estimate of 169K new nonfarm private employment jobs from ADP. That is the lowest number since the 157K in January of last year, 15 months ago. In addition, the previous month's estimate was revised downward from 189K to 175K.

...

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Sabrient

Sector Detector: Bulls hold the line as market coils in anticipation of a bigger move

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

Courtesy of Sabrient Systems and Gradient Analytics

After posting record highs the previous week, stocks closed last week slightly down overall. But the major indexes held their psychological levels, including Dow at 18,000, S&P 500 at 2100, NASDAQ at 5,000, and Russell 2000 at 1200. Although the bulls continue to find reliable support levels nearby, strong overhead technical resistance and neutral-to-defensive rankings in our SectorCast fundamentals-based quant model continue to suggest that a major upside breakout is not quite imminent, although a selloff doesn’t seem to be in the cards, either. Overall, stocks appear to be coiling ever tighter while awaiting...



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OpTrader

Swing trading portfolio - week of May 3rd, 2015

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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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Digital Currencies

Why Bitcoin's male domination will be its downfall

Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.

More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved. 

Why Bitcoin's male domination will be its downfall 

By Felix Salmon

Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Market Shadows

Kimble Charts: South Korea's EWY

Kimble Charts: South Korea's EWY

By Ilene 

Chris Kimble likes the iShares MSCI South Korea Capped (EWY), but only if it breaks out of a pennant pattern. This South Korean equities ETF has underperformed the S&P 500 by 60% since 2011.

You're probably familiar with its largest holding, Samsung Electronics Co Ltd, and at least several other represented companies such as Hyundai Motor Co and Kia Motors Corp.

...



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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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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!




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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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