Posts Tagged ‘ESRX’

Call Buyers Shrug Off $2 Billion Disaster, Position For UBS Recovery Story

Today’s tickers: UBS, MHP, ESRX & DGX

UBS - UBS AG – Switzerland’s largest bank said it may be unprofitable in the third quarter due to the staggering $2 billion in trading losses one of its employees racked up in unauthorized dealing. The news sent shares in UBS down as much as 11.6% to a two-year low of $11.21, but options traders appear to have largely shrugged off concerns and are betting on a rebound in the price of the underlying. Call buying and put selling on the stock appear to be the most oft-employed strategies of the day. Investors expecting shares to recover in the next five weeks picked up roughly 3,100 calls at the October $12 strike for an average premium of $0.73 each. Call buyers profit if shares in UBS rally 12.5% over the stock’s current price of $11.32 to exceed the average breakeven point at $12.73 by expiration day next month. Meanwhile, put sellers targeted the October $10, $11 and $12 strikes, suggesting some investors expect shares to exceed those levels through October expiration. Traders pocketed an average premium of $1.27 per contract on the sale of roughly 615 puts at the October $12 strike. Premium received is money in the bank for sellers of the options as long as the contracts expire worthless next month. Longer-dated calls drew some attention, as well. Investors snapped up around 2,000 calls at the December $12 strike for an average premium of $1.10 each. Traders may see the value of these calls appreciate if shares in UBS reverse course over the next few months to December expiration. The positions are profitable at expiration if shares exceed the effective breakeven price of $13.10.

MHP - McGraw-Hill Companies, Inc. – A burst of activity in McGraw-Hill call options minutes before 12:00 pm…
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Long-Term Bulls Eye Express Scripts Options…Again

Today’s tickers: ESRX, RPTP, SKX & SLAB

ESRX - Express Scripts, Inc. – Sizable bullish bets in long-dated call and put options on the pharmacy benefit management services provider suggest shares in Express Scripts may sky-rocket over the next year and a half. Similar options combination plays were initiated at the end of last week following news Express Scripts agreed to purchase rival Medco Health Solutions Inc. for $29.1 billion in a deal that would make the company the largest U.S. pharmacy benefits manager. Shares in Saint Louis, MO-based Express Scripts slipped 0.60% during the first half of the trading session to $56.95 as of 11:50 am ET. The price of the underlying rallied as much as 12.0% to $57.47 on news of the merger agreement. Large prints in January 2013 contract on Friday appeared to be the work of an investor selling blocks of puts to partially finance the purchase of a bull call spread. The strategist responsible for the four-legged transaction rakes in maximum available profits on the trade if shares in ESRX top $70.00 at expiration. Heavy trading in the same expiry within the first hour of the opening bell indicates another options player may see shares in Express Scripts soaring to $80.00 during the next 18 months. The more recent long-term bullish combo trade on Express Scripts differs somewhat from that observed on Friday, but both transactions are looking for shares to reach all-time highs. The investor this morning appears to have sold 8,000 puts at the Jan. 2013 $42.5 strike for a premium of $2.19 each, spread against the purchase of an 8,000-lot Jan. 2013 $65/$80 call spread at a net premium of $3.34 per contract. The sale of the put options reduces the net cost of the three-way transaction to $1.15 per contract, thus positioning the investor to profit should shares in Express Scripts surge 16.2% over the current price of $56.95 to surpass the effective breakeven point to the upside at $66.15 at Jan. 2013 expiration.…
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Option Bulls Buy Calls to Celebrate New Coverage of NuVasive Spinal Treatment

Today’s tickers: NUVA, TRE, FXE, BBY, DECK, LEN, AA, ESRX, JDSU & UNH

NUVA – NuVasive Inc. – The spinal surgery equipment maker’s shares are up sharply today by more than 32.50% to $39.38. NuVasive’s shares surged on news health insurance company, Aetna, is changing its policy to allow reimbursement for surgical spine treatment know as lateral interbody fusion. Bullish posturing in call options was observed today following the news about extended coverage for the treatment, which was previously excluded for being an experimental procedure. Plain-vanilla call buyers picked up nearly 2,000 contracts at the March $40 strike for an average premium of $1.34 apiece. Investors long the calls are prepared to pocket profits if NUVA’s shares rally above the effective breakeven point on the calls at $41.34 by expiration day next month.

TRE – Tanzanian Royalty Exploration Corp. – British Columbia, Canada-based gold mining company, Tanzanian Royalty Exploration Corp., attracted heavier than usual two-way trading traffic in put options today. The firm, which explores and acquires gold properties in Tanzania, realized a 2.30% rally in its shares during the session to $4.05. More than 25,000 in-the-money put options changed hands at the October $5 strike with the majority of the volume trading to the bid. Approximately 14,200 puts were sold for an average premium of $1.31 per contract, while 5,200 put contracts were purchased at that strike for roughly the same amount of premium. In-the-money put sellers are perhaps anticipating continued bullish movement in the price of the underlying by October expiration. Investors short the puts keep the full $1.31 premium per contract if TRE’s shares rally above $5.00 by expiration day. Put sellers stand ready to have shares of the underlying stock put to them at an effective price of $3.69 apiece in the event that the put contracts remain in-the-money through expiration day.

FXE – CurrencyShares Euro Trust – Shares of the FXE exchange-traded fund, which reflects the price of the Euro, are up 0.45% to $135.88 in afternoon trading. A decent-sized put butterfly spread on the fund indicates one investor does not expect the current rally to continue. On the contrary, the parameters of the spread benefit the trader most if shares decrease roughly 2.25% in value by April expiration. To enact the bearish butterfly play, the investor purchased 5,000 puts at the April $134 strike for a premium of $1.50 apiece [wing 1], and picked…
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Option Player Reenergizes Bullish Stance on RRI Energy, Inc.

Today’s tickers: RRI, USO, GLD, MT, AEM, INTC, ESRX, C, KO & GEOY

RRI – RRI Energy, Inc. – A large-volume call option combination play launched RRI Energy onto our ‘most active by options volume’ market scanner this afternoon. The investor responsible for the activity banked profits by selling-to-close a previously established long call position. The trader also initiated a new bullish stance on the stock to position for a near-term rebound in shares of the underlying. RRI’s shares are down more than 2.5% today to $5.58. It appears the investor originally purchased 35,000 calls at the now deep in-the-money December 4.0 strike for a premium of 1.30 apiece in early November when shares were at $5.15. Today the trader sold the chunk of call options for 1.55 each, banking net profits of 15 cents per contract. Finally, the RRI-optimist established a fresh bullish stance at the in-the-money January 5.0 strike by buying 35,000 calls for a premium of 85 cents apiece. Shares must rally about 5% from today’s price in order for the investor to break even at $5.85 by expiration next month. The increase in demand for option contracts on the stock lifted option implied volatility significantly. Volatility on RRI Energy increased 21.66% from an intraday low of 55.31% to a high of 67.29%.

USO – United States Oil Fund LP – Shares of the USO fund slipped slightly lower during the trading session, falling less than 1% to $36.50, as of 3:00 pm (EDT). Short strangle plays in the July contract suggest shares of the fund are likely to remain range-bound for the next seven months to expiration. Investors shed 2,500 calls at the July 38 strike for a premium of 3.56 apiece, in conjunction with the sale of the same number of puts at the lower July 33 strike for a premium of 2.75 each. Short-stranglers receive a gross premium of 6.31 per contract on the trade. They keep the full amount of premium if USO’s shares trade within the strike prices described through expiration. Shares of the fund traded within the range of $33-$38 for the four month period starting July 15, 2009, and ending October 12, 2009. Perhaps today’s short strangle sellers expect to see similar inertia in USO shares for the next seven months to expiration.

GLD – SPDR Gold Trust ETF – A bullish risk reversal on the gold exchange-traded fund suggests…
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Wary Wells Fargo bull adopts cautious collar approach

Today’s tickers: WFC, MA, S, ESRX, CREE, RIMM & CELG

WFC Wells Fargo & Co. – Shares have rallied slightly by about 1% to $14.37. Options investors were very active on the stock today, but one trade in particular caught our attention in the May contract where one investor has established a protective collar in conjunction with a large volume-sale of call options as a vehicle to fund the strategy. To initiate the collar, this trader purchased shares of the underlying stock and simultaneously purchased 42,000 puts at the May 12 strike price for a premium of 1.70. The put options serve to protect this investor should shares experience a significant decline over the course of the next two months. The sale of 42,000 calls at the May 20 strike price for 1.00 was established for a couple of reasons. First, the 1.00 premium pocketed on the sale effectively reduces the cost of the put options to just 70 cents apiece. Second, the short position at the upper strike price has effectively given this trader an exit strategy should shares rally to $20.00 by expiration. If such a rally were to occur, the shares could be called away from him at expiration and he would have reeled in gains of 39% on the $5.63 rise in the value of the underlying. Of course, if this scenario were to take place, the puts purchased would expire worthless and the net cost of 70 cents he paid out today would be lost.

MA MasterCard, Inc. Class A – The global payment solutions company is off by more than 4.5% to $159.87. MA appeared on our ‘most active by options volume’ market scanner after one investor took a bullish stance on the company using options. At the May 180 strike price 10,000 calls were purchased for 5.40 apiece while at the May 200 strike 10,000 calls were sold for a premium of 1.40 per contract. The net cost of the trade amounts to 4.00 and yields a maximum potential profit for the investor of 16.0 if shares were to rally up to $200.00 by expiration next month. Shares would need to experience a rally of about 15% from the current price in order to reach the breakeven point at $184.00. MasterCard has not traded above $184.00 since October of 2008, but this investor appears to be optimistic that MA will rebound in the…
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Zero Hedge

Retired Green Beret Fears The Final Government Objective: Enslave Or Kill Us All

Courtesy of ZeroHedge. View original post here.

Authored by Jeremiah Johnson (Nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

In the world situation, we are all aware of the “hot spots,” such as North Korea, Syria, and Ukraine that could escalate into a full-blown regio...



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ValueWalk

So Value Investing Is Not Dead According To Goldman

By The Acquirer's Multiple. Originally published at ValueWalk.

I had to smile when I read this article on Bloomberg titled, Goldman Sachs Mulls the Death of Value Investing.

The article states:

There isn’t much value in value investing these days.

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Phil's Favorites

Saudi Reshuffle Could Completely Shake Up Oil Markets

Courtesy of Nick Cunningham, OilPrice.com

The power restructuring in Saudi Arabia this week led to the elevation of 31-year-old Mohammed bin Salman to crown prince, essentially ensuring that he will become the youngest king of Saudi Arabia in the not-too-distant future. The heir apparent has already been effectively running the country for the past few years, so the move was not entirely a shock. Nevertheless, the effects on the oil market could be profound.

The new crown prince is known to be a bit ...



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Insider Scoop

Marveling At Multi-Factor ETFs

Courtesy of Benzinga.

Related This Goldman ETF Keeps Growing Getting Smarter About Smart Beta Related ...

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Digital Currencies

Bitcoin In Perspective: Bill Gates Worth More, Gold 200 Times More

Courtesy of Mike Shedlock, MishTalk

An interesting article on HowMuch puts the Bitcoin phenomenon into proper perspective.

Google founder Larry Page’s net worth beats bitcoin’s entire market cap. Microsoft founder Bill Gates’s net worth is double Bitcoin.

Please consider The Bitcoin Economy, in Perspective.

Last year, Bitcoin became more stable than gold, and earlier this year, the price of a Bitcoin surpassed that of an ounce of gold for the first time. Currently, all the bitcoin in the world is ...



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Chart School

Russell 2000 at Rising Support

Courtesy of Declan.

There wasn't much to say about today, but the one index which caught my attention was the Russell 2000. The index caught a bounce in demand at the rising trendline and also did enough to recover the 20-day MA. Traders looking for pullback opportunity could take a look at the Russell 2000. Stops on a loss of 1,397.


The Nasdaq is primed for a move to challenge 6,350. Today's doji marks indecision just below 6,250 but if it can push above this price level it would likely trigger a spate of short covering. Technicals hav...

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Biotech

Even though genetic information is available, doctors may be ignoring important clinical clues

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

Even though genetic information is available, doctors may be ignoring important clinical clues

Courtesy of Greg HallCase Western Reserve University

Digitized strand of DNA. Mathagraphics/From www.shutterstock.com

With the availability of home genetic testing kits from companies such as “23andMe” and “Ancestry DNA,” more peo...



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OpTrader

Swing trading portfolio - week of June 19th, 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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Mapping The Market

Frontier laid off state Senate president after broadband vote it didn't like

Courtesy of Jean-Luc

Speaking of FTR – not nice people…

Frontier laid off state Senate president after broadband vote it didn’t like

By Arstechnica.com

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly.

West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year,&...



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Promotions

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Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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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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FeedTheBull - Top Stock market and Finance Sites



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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