Posts Tagged ‘GAP’

Bulls Find Lululemon Call Options Irresistible as Shares Soar

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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Humana Call Options Fly Off the Shelves as Shares Hit New 2-Year High

 Today’s tickers: HUM, SIGA, ALXN, CBS, REP & GAP

HUM - Humana Inc. – Call options on the health benefits company are in high demand this afternoon with shares of the underlying stock trading higher by 3.15% to arrive at $53.85 in the final hour of the session. Shares rallied as much as 3.965% earlier today to secure a new 2-year high of $54.27. An analyst at Wedbush said earlier that health insurers may wind up reporting a better third quarter than previously forecast. Additionally, she mentioned Humana is her top pick for a health insurer that’s most likely to top Wall Street estimates in the third quarter. Humana is scheduled to report results ahead of the opening bell on November 1, 2010. Activity in November contract calls indicates one big player sees today’s rally in Humana’s shares extending through to expiration day next month, post-earnings. It looks like the bullish investor purchased 14,176 calls outright at the November $55 strike for an average premium of $1.425 per contract. The call buyer makes money if HUM’s shares rally another 4.8% over the current price of $53.85 to surpass the average breakeven point to the upside at $56.425 ahead of expiration. Options implied volatility on HUM is up 11.6% to arrive at 32.71% with 35 minutes remaining in the session.

SIGA - SIGA Technologies, Inc. – Shares of the bio-defense company jumped 52.7% today to an all time high of $13.07 on reports the firm won a U.S. government contract worth up to $2.8 billion to supply its smallpox antiviral drug. The stock is currently up 42.75% at $12.22 heading into the close. Options traders initiated bullish stances on the stock right out of the gate this morning in order to position for continued appreciation in the price of SIGA’s shares. Investors picked up approximately 1,200 in-the-money calls at the October $12 strike for an average premium of $0.44 apiece, and are poised to profit should shares exceed $12.44 through expiration on Friday. Nearly 1,000 calls were…
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Delta-Neutral Trade Suggests Guarded Optimism on Ventas Ahead of Q2 Earnings

Today’s tickers: VTR, BIDU, WAT, DHI, LCC, ODP, GAP & ISLN

VTR – Ventas, Inc. – Shares of the REIT with a portfolio of seniors housing and healthcare properties in the U.S. and Canada rallied as much as 2.04% this afternoon to reach an intraday- and new 52-week high of $51.57. Ventas popped up on our ‘hot by options volume’ market scanner in the second half of the trading session after one cautiously optimistic investor bought a large amount of stock in combination with a delta neutral put spread in the August contract. The transaction shows guarded optimism by one investor ahead of the firm’s second-quarter earnings report scheduled for release ahead of the opening bell on Wednesday morning. The options strategist paid a premium of $1.05 per contract for an 8,500-lot August $40/$50 debit put spread with a .32 delta tied to the purchase of 272,000 Ventas shares at $51.37 each. The investor is hoping to see shares rally to new highs following earnings, but has shelled out extra premium in order to get long downside protection in case Ventas’ shares decline.

BIDU – Baidu, Inc. – The Chinese-language internet search provider’s shares jumped 3.6% to an intraday high of $80.87 today after the firm received an upgrade to ‘buy’ from ‘neutral’ with an increased target share price estimate of $92.00 from $69.00 at UBS. Shares were also lifted higher on news Baidu is in talks with mobile phone makers to discuss use of the firm’s search box on devices sold in China. The price of the underlying stock is currently up 2.05% on the day to arrive at $79.67 as of 3:00 pm (ET). Options players itching for continued appreciation in the price of the underlying shares through the end of this month purchased weekly call options on the stock that are set to expire on July 30. Investors picked up 1,000 calls at the July $80 strike for an average premium of $1.48 each. Call buyers at this strike make money if Baidu’s shares rally another 2.3% to trade above the average breakeven price of $81.48 by expiration day. Optimistic individuals looking for BIDU’s shares to hit a new 52-week high before the week is through purchased some 2,100 call options at the higher July $85 strike for an average premium of $0.29 a-pop. Shares must increase at least 7.05% in order for July $85 strike call…
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Bull Buys Call Spread as Arena Pharmaceuticals’ Shares Soar

Today’s tickers: ARNA, CQB, GAP, KWK, MCD & FL

ARNA – Arena Pharmaceuticals, Inc. – Shares of the clinical-stage biopharmaceutical company shot up 10.7% today to an intraday high of $5.89, inspiring one options strategist to purchase a debit put spread in the October contract. Arena’s shares have increased significantly since an FDA advisory panel said it does not recommend rival Vivus’ obesity drug, Qnexa, receive FDA approval. The bullish options investor prepared for continued upward movement in Arena’s shares by purchasing 3,000 now in-the-money calls at the October $5.0 strike for a premium of $2.45 each, and selling the same number of calls at the higher October $7.0 strike at a premium of $1.45 apiece. The net cost of the transaction amounts to $1.00 per contract. Thus, the trader is prepared to make money should the biopharmaceutical firm’s shares rally 1.85% over the current price of $5.89 to trade above the effective breakeven price of $6.00 by October expiration day. The investor walks away with maximum potential profits of $1.00 per contract if Arena’s shares surge 18.85% to exceed $7.00 by expiration. In the nearer-term September contract, another bullish player opted to sell 2,700 puts at the September $2.0 strike to take in an average premium of $0.30 per contract. The put seller keeps the premium received on the transaction as long as Arena’s shares trade above $2.00 through expiration day in September. Options implied volatility on ARNA is higher by 14.1% to 101.05% as of 2:55 pm (ET).

CQB – Chiquita Brands International, Inc. – Call buying on the international marketer and distributor of bananas and fresh produce continues today with shares of the underlying stock trading higher by 3.15% to stand at $13.10 as of 1:20 pm (ET). Bullish traders started to buy November $12.5 strike calls yesterday afternoon as Chiquita’s shares rallied nearly 5.5% to end Thursday afternoon at an intraday high of $12.72. The company’s shares continued their ascension today, inspiring investors to build up bullish stances on the stock ahead of the second-quarter earnings report next Thursday. Investors purchased approximately 3,000 calls at the November $12.5 strike by 1:25 pm (ET) for an average premium of $1.73 apiece. Call buyers make money if Chiquita’s shares increase another 8.6% to surpass the average breakeven point at $14.23 by November expiration. Traders buying the calls on Thursday have a clear first-mover advantage because they paid an…
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Bears Binge on Put Options as Diamond Offshore Drilling, Inc. Shares Nosedive

Today’s tickers: DO, GAP, RIG, WMS, IMA, BAX, IGT, CAT, CCJ, CVS & WM

DO – Diamond Offshore Drilling, Inc. – Shares of the world’s largest U.S. deep-water oil driller fell as much as 7.6% to an intraday low and new 52-week low of $54.70 after businessinsider.com reported the firm’s Ocean Saratoga rig is leaking crude into the Gulf of Mexico. Goldman Sachs’ ratings cut of Diamond Offshore shares to ‘sell’ from ‘neutral’, as well as a downgrade to ‘underperform’ from ‘market perform’ with a 12-month target share price of $54.00 at FBR Capital Markets, also helped drive the stock lower today. Bearish options investors populated the stock with pessimistic plays, buying near-term put options and selling calls in the June contract. Traders expecting Diamond’s shares to continue to decline purchased 1,200 now in-the-money puts at the June $58.63 strike for an average premium of $4.07 apiece. Investors holding these contracts profit if shares trade beneath the average breakeven price of $54.56 by June expiration. Buying interest spread to the lower June $54.88 strike where 1,100 puts were picked up for an average premium of $2.26 each. Another 1,100 puts were purchased at the June $53.63 strike for a premium of $1.82 per contract. Finally, uber-bearish players coveted 1,600 put options at the lower June $49.88 strike by paying an average premium of $0.92 apiece. Shares of the underlying stock must plunge 10.5% from the current intraday low of $54.70 before June $49.88 strike put buyers start to garner profits beneath the average breakeven price of $48.96. Investors not expecting Diamond’s shares to rally ahead of June expiration sold short 1,300 calls at the June $61.75 strike to pocket an average premium of $0.61 per contract. The premium is safe in call-sellers’ wallets as long as shares of the underlying stock trade below $61.75 through expiration day. Options implied volatility on Diamond Offshore Drilling is up 15.1% to 59.94% as of 3:10 pm (ET). Earlier implied volatility surged roughly 18% to 61.42%, DO’s highest reading of volatility in at least one year.

GAP – Great Atlantic & Pacific Tea Co., Inc. – Investors bought put options on the operator of conventional supermarkets, combination food and drug stores and discount food stores today with shares of the underlying stock trading lower by 4.45% to stand at $4.08 as of 2:38 pm (ET). Pessimistic traders expecting GAP’s shares to continue to decline…
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Testy Tuesday Morning

Wow – what a lot of work to get back to last Tuesday’s high! 

As usual, the vast majority of gains came in pre-market trading and the rest came in light-volume, early morning trading while the rest of the day was dominated by every buyer finding a willing seller for 75% of the day’s volume.  We saw what happened on Thursday when someone big wants to sell and there are no buyers so we’ll see how long the bull’s luck (manufactured or otherwise) will hold out as we begin to get economic data along with some early earnings reports.

The Ag sector popped 2% yesterday ahead of tonight’s earings from MOS with MON checking in tomorrow morning so we’ll see how wise those last-minute bets were in short order.  SONC also has earnings tonight and we like those guys long-term.  SONC makes a decent buy/write candidate as you can buy the stock for $10.29 and sell June $10 puts and calls for $2.25 for a net entry of $8.04 with a very nice 24% profit if called away at $10 and an average entry of $9.02 (a 12% discount) if more stock is put to you below $10 in June. 

FDO and WOR also report tomorrow morning.  FDO will be interesting but a weak dollar probably hurt them last quarter.  Tomorrow night we hear from BBBY, BLUD, OHB and Sonic competitor RT, who seem a bit pricey at $7.50.  Thursday we get our first real builder, LEN along with STZ and TXI.  After the bell on Thursday we hear from APOL, CRI and SCHN with GBX and PSMT on Friday.  AA officially kicks of earnings season next Monday with GAP, INFY, KBH, BGG, SCHW, SHFL, INTC and JPM highlighting the reporters. 

We have plenty of data this week including Factory Orders and Pending Home Sales at 10 am along with December Auto Sales throughout the day (did you get a new car for Christmas?).  Tomorrow is jobs day, with the ADP Report and Challenger Job Cuts ahead of the bell followed by ISM Services (yesterday’s ISM was a nice beat) and, of course, Crude Inventories at 10:30 which are unlikely to sustain $82 oil (USO Jan $40 puts for .80 are a good way to play this)We talked about the other stuff yesterday so I won’t repeat it – suffice to say we have plenty of data this week to see if we justify these lofty levels.

Could Apple sell 2 million units of the new tablet at $600 each to generate $1.2 billion in 2010? Piper Jaffray analyst Gene Munster thinks they will.Apple generated almost $35B in revenue during the last 12 months.  If Munster is correct, the tablet could have a nice 3%+ impact on revenue and improve year-over-year revenue growth.Expectations are that it will be similar to the iPod touch but larger and capable of running most of the iPhone Apps and include a 3G cellular modem.Huge discussion on TechMeme.Kara Swisher / BoomTown:   The Jesus Tablet Will Walk on Water and Turn Fishes Into Moneyinternetnews.com:   Apple Touchscreen ‘iPad’ Could Take on NetbooksEric Slivka / MacRumors:   New Analyst Mockup and Sales Estimates for Apple’s TabletThe Mac Observer:   Analyst: Apple Tablet Worth $1.2 BillionDerek Thompson / The Atlantic Business Channel:   Apple Tablet: Super E-Reader or Super Mini-Computer?Everyone is talking…
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ValueWalk

Thursday's GDP Report May Hold Big Surprises

By Gary D. Halbert. Originally published at ValueWalk.

Thursday's GDP Report May Hold Big Surprises by Gary D. Halbert

FORECASTS & TRENDS E-LETTER
by Gary D. Halbert

July 28, 2015

IN THIS ISSUE:

  1. Chair Yellen All But Promises Rate Hike This Year
  2. Why is the Fed So Preoccupied With Raising Rates?
  3. Thursday’s 2Q GDP Report Could Be a Surprise
  4. Annual GDP Revisions Could Give Fed Green Light

Overview

The next few days should be an interesting time in the markets. The Fed Open Market Committee (FOMC) is meeting today and tomorrow and...



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Phil's Favorites

What happens to stocks after nothing happens to stocks?

Joshua points out that S&P action this flat, as it's been from January through July, is actually quite rare. So what's next?

What happens to stocks after nothing happens to stocks? 

Courtesy of 

My latest piece for Fortune Magazine just went live today. In it, I look at the consequences for a stock market that’s gone nowhere halfway through the year, as is the case in 2015…

You might have looked at your last brokerage statement and wondered why you’re no longer seeing the asset balance increasing like it had been. You may have ta...



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Market News

News You Can Use From Phil's Stock

 

Financial Markets and Economy

The U.S. Economy's Top Speed Has Probably Been Overestimated for Years (Bloomberg)

Revisions to the U.S. gross domestic product since 2011 reinforce the shift to a slower era of economic growth and underscore the difficulties the Federal Reserve faces in gauging just when to inch interest rates away from the zero-lower bound.

Alpha Bankruptcy Plan Shows Mines Must Die for O...



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Zero Hedge

Liar Loans Pop up in Canada's Magnificent Housing Bubble

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter   www.wolfstreet.com   www.amazon.com/author/wolfrichter

For a long time, the conservative mortgage lending standards in Canada, including a slew of new ones since 2008, have been touted as one of the reasons why Canada’s magnificent housing bubble, when it implodes, will not take down the financial system, unlike the US housing bubble, which terminated in the Financial Crisis.

Canada is different. Regulators are on top of it. There are strict down payment requirements. Mortgages are full-recourse, so strung-out borrowers couldn’t just mail in their ke...



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Chart School

Markets Remain Near and Above, Yesterday's Highs

Courtesy of Declan.

Tech indices finished strong after they overcame the opening half hour of selling. The Fed statement was greeted favorably, although market breadth is not looking pretty. The Nasdaq still has a distance to travel to make back all of its losses, but has done well to hold up against Semiconductor weakness.


The Semiconductor Index is struggling to make inroads against past losses as the Nasdaq and Nasdaq 100 push respectable gains. I find it hard to see how this scenario can continue, ...

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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

Travel indicator being put to critical tests

Courtesy of Chris Kimble.

The American Economy is driven a good deal by the consumer.

The table below reflects that nearly 70% of GDP is based consumption.

CLICK ON CHART TO ENLARGE

The 4-pack below looks at consumption with a focus on the travel and leisure sector, by looking at Avis (CAR), Hertz (HTZ), Expedia (EXPE) and Priceline (PCLN).

CLICK ON CHART ABOVE TO ENLARGE

While many seem to be occupied by the news abou...



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Sabrient

Sector Detector: Lackluster earnings reports put eager bulls back into waiting mode

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

Courtesy of Sabrient Systems and Gradient Analytics

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Corporate earnings reports have been mixed at best, interspersed with the occasional spectacular report -- primarily from mega-caps like Google (GOOGL), Facebook (FB), or Amazon (AMZN). Some of the bul...



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OpTrader

Swing trading portfolio

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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Digital Currencies

Gold Spikes Back Above $1100, Bitcoin Jumps

Courtesy of ZeroHedge. View original post here.

Gold is jumping after the overnight double flash-crash...testing back towards $1100...

Bitcoin is back up to pre-"Greece is Fixed" levels...

Charts: Bloomberg and Bitcoinwisdom

...

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Pharmboy

Baxter's Spinoff

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

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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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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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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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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