VOYA - ING US, Inc. – Shares in ING Group’s U.S. retirement, investment and insurance business are up as much as 8.0% today to $26.98, the highest level since the company’s May 2nd IPO. ING US was rated new ‘buy’ at BTIG LLC with a 12-month target share price of $31.00 today. The stock has rallied nearly 40% over the IPO price of $19.50, and some options traders are positioning for the price of the underlying to extend gains during the second half of the year. November expiry options are the most active contracts by volume on VOYA today, with notable fresh interest in the Nov $25 and $30 calls. Traders appear to have purchased around 200 lots at each striking price for average premiums of $2.71 and $1.14 each, respectively. Call buyers stand ready to profit at November expiration should shares in ING US rally another 2.7% and 15% to surpass average breakeven prices of $27.71 and $31.14, respectively. Meanwhile, traders snapping up Nov $20 and $25 strike puts are positioned to make money in the event of a pullback in the price of the underlying through November expiration. The company is scheduled to report first-quarter earnings ahead of the open on Thursday. Overall options volume on VOYA is sizable, with more than 1,500 contracts in play as of 12:15 p.m. ET versus overall open interest on the stock of 190 contracts.
GRPN - Groupon, Inc. – A large trade in Groupon options in the early going on Monday looks for the price of the underlying to remain in the single-digits through January of 2014. Shares in GRPN are down 0.45% on the day at $6.94 as of 12:20 p.m. ET. The stock has increased roughly 30% since the company reported better-than-expected first-quarter revenue and a narrower-than-expected first-quarter loss on May 8th. It looks like one strategist betting shares in Groupon will trade below $10.00 through the start of 2014 sold around 50,000 calls at the Jan 2014 $10 strike for…
GRPN - Groupon, Inc. – Shares in Groupon are up 11.11% at $11.00 today on expectations the company may report better-than-expected first-quarter earnings after the final bell. Options on the stock are quite active as well, but not all of the positioning is looking for a positive earnings surprise tonight. Fresh interest building in the June expiry puts portends potential fresh record lows for the shares in the near future. One-by-two June $7.0/$9.0 ratio put spreads purchased this morning position traders to profit from limited bearish movement in the price of the underlying during the next five weeks. Of the more than 3,300 put options in play at the June $7.0 and $9.0 strikes, the largest blocks of options changing hands are the purchase of 486 $9.0 strike puts spread against the sale of 972 $7.0 strike options, done at a net premium outlay of $0.33 per contract. The ratio spread may be a profitable strategy should Groupon’s shares drop 21.1% to slip beneath the effective breakeven point at $8.67. Maximum possible profits of $1.67 per contract are available on the positions if shares in the name drop 36.4% to settle at $7.00 at June expiration. Groupon’s shares on Friday traded down to an all-time low of $9.63.
DLTR - Dollar Tree Stores, Inc. – Bearish options are in play on Dollar Tree, Inc. this morning ahead of the discount consumer goods retailer’s first-quarter earnings report on Thursday. Shares in Dollar Tree are currently down 1.5% at $101.05 as of 12:50 in New York. It looks like the investor buying a sizable debit put spread on DLTR this morning paid an average net premium of $3.31 per contract for a roughly 3,000-lot June $85/$100 spread. The position makes money if shares in…
I entered a few tournaments in Atlantic City, made it to a couple of final tables but didn't win any. It did remind me that a bluff can only get you so far – at a certain point, you have to actually have the cards in order to win. As I pointed out to Members this morning – the Global Markets have bluffed their way through the first quarter and now comes earnings season and it's time for the economy to show it's cards and now we'll see who ends up with all the chips!
These are NOT cards you want to be playing with unless you are forced. That's the thing, GS, JPM, MS, Fund Managers, etc – they HAVE to play. Since they have to play whatever cards that are dealt – they do the logical thing – THEY BLUFF! Although what's scary about the Banksters is that, when they bluff, it's like the dealer bluffing because they control so much of the game and their only real goal is to get you to play so they can rake…
GRPN - Groupon, Inc. – The provider of a diverse mix of local daily deals featuring anything from Botox injections and manicures to fine-dining experiences and cupcakes, popped up on our scanners this morning after a sizable options combo play was initiated in the May expiry. Shares in Groupon are in negative territory this afternoon, but earlier increased as much as 2.6% to touch an intraday high of $18.76. The stock, which reached a peak of $27.78 in its first day as a publicly traded company back in November, just about halved in value in the weeks following the IPO. Quick rallies in the share price paired with subsequent pullbacks have been a fairly consistent pattern for GRPN shares in 2012, though recently the stock price has been less volatile, trading in the range of roughly $16.25 to $18.60 in the past few weeks. Perhaps the relative stagnation in the shares spurred one option strategist to position for the stock to take another stab at the upside in the next couple of months. The trader appears to have sold 5,000 May $13 strike put options in order to partially finance the purchase of a 5,000-lot May $19/$22 call spread, all for a net premium outlay of $0.55 per contract. The three-way spread prepares the trader to make money should GRPN’s shares rally 7.8% over the current price of $18.14 to surpass the average breakeven point at $19.55 by expiration in May. Maximum possible profits of $2.45 per contract are available on the position as long as shares in the daily deals provider jump 21.3% to settle above $22.00 at expiration. Groupon, Inc. is scheduled to report first-quarter earnings after the market closes on May 8th.
Our senior index finished the day at 1,358.04, just 0.96 under our 10% line at 1,359. Oddly enough, it never actually crossed the line that we had predicted would be the top of this run in April of 2009. It's a simple 2% overshoot of the 100% run from the S&P bottom at 666.
If the S&P can get over the line and hold it – we will be THRILLED to finally redraw our Big Chart but, if not, then this is just the blow-off top of the range, reeling in the suckers ahead of the big reversal that no one could have possibly seen coming (except this guy but he's like 100 and just got divorced, so he's bound to be in a bad mood).
Is there anyone who was born SINCE radio who is willing to still be bearish? As you can see from David Fry's chart, since December 19th, other than a few red days out of over 40 – it's been tough to be a bear. This is what it was like in 1999, when the experienced market players would be well-hedged and missing the rally while some kid who works for him quits because he bet his student loan money on Yahoo and now drives a Porsche.
Sure 9 months later the Porsche was repossessed and the kid was flipping burgers but WE WANT TO BE THAT KID – IT'S FUN TO BE THAT KID – until it isn't again. The funny thing is, we only gave those dot com companies Millions when they IPO'd – now we give out Billions because, of course, this time is different, it's a new paradigm, this changes everything, you have to understand the new metrics, sock puppets rule….
McDonald's was founded in 1940 by two brothers actually named McDonald. Ray Krok bought the chain from them and created the World's greatest franchise which now has over 26,000 franchise operations and over 6,000 company stores employing about 1.7M people worldwide selling $24Bn worth of food a year with a $5Bn net profit. Facebook has 3,200 people but they generate $1.2M in revenues per employee ($3.8Bn) and drops $1Bn to the bottom line. Facebook's assets are mainly IP and those are about as valuable as MySpace's assets now…
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 email@example.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.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
The first estimate of GDP for the second quarter of 2014 came roaring in at 4% annualized growth. The following is an initial analysis as written by Neil Irwin from the NYT:
"First, here’s the overall growth number. As it shows, the 4 percent rate of economic expansion in the April-through-June quarter was the strongest since last summer and the third-strongest quarter in the expansion that began five years ago.
But there is an important qualifier. Of the 4 percent reported growth, 1.66 percentage points was attributable to businesses increasing their inventories. But when companies ma...
Having waited until after the US equity markets closed, Portugal's troubled Banco Espirito Santo unveiled an enormous EUR 3.577 Billion loss - that is 15 times larger than the loss the bank suffered a year earlier. The data - to end-June, before the crisis really got going - already shows notable deposit flight, a 73.1% plunge in banking income, and a EUR 3 billion collapse in repoable assets (i.e. liquidity). On the heels of this Portugal's securities regulator has enforced a short-selling ban on BES... we suspect they would not have done that if all was systemically well in Portugal.
Memo to CAPE Slaves
Courtesy of Joshua M Brown
You don’t hear much out of the adherents of CAPE these days, as even its most ardent fans have given up on it as a timing tool.
Earlier this year and during much of last year, I’d taken the Cyclically Adjusted Price-Earnings ratio to task for various reasons, most notably the fact that it didn’t allow for accounting changes (GAAP losses are recorded differently), structural changes in our economy (are we all still farmers?), structural changes in the makeup of the stock market (isn’t software inherently more profitable than railroading?), taxation (dividends get preferential treatment versus ordinary income) etc. See ...
Shares in packaged foods producer Kellogg Co. (Ticker: K) are in positive territory on Monday afternoon, trading up by roughly 0.20% at $65.48 as of 2:20 p.m. ET. Options volume on the stock is well above average levels today, with around 12,500 contracts traded on the name versus an average daily reading of around 1,700 contracts. Most of the volume is concentrated in September expiry calls, perhaps ahead of the company’s second-quarter earnings report set for release ahead of the opening bell on Thursday. Time and sales data suggests traders are snapping up calls at the Sep 67.5, 70.0 and 72.5 strikes. Volume is heaviest in the Sep 72.5 strike calls, with around 4,600 contracts traded against sizable open interest of approximately 11,800 contracts. It looks like traders paid an average premium of $0.37 per contrac...
Once again, stocks have shown some inkling of weakness. But every other time for almost three years running, the bears have failed to pile on and get a real correction in gear. Will this time be different? Bulls are almost daring them to try it, putting forth their best Dirty Harry impression: “Go ahead, make my day.” Despite weak or neutral charts and moderately bullish (at best) sector rankings, the trend is definitely on the side of the bulls, not to mention the bears’ neurotic skittishness about emerging into the sunlight.
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, incl...
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We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about."
All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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