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Posts Tagged ‘HBC’

Frustrating Thursday – From .EUphoria to .DEspair

SPY 5 MINUTE.DE is Germany's web domain.

So I'm trademarking .DEspair to consolidate all the anti-EU statements coming out of Germany this week as the rhetoric reaches a crescendo and goes up from there.  .EU is, of course the EU domain and .EUphoria is where we will store all the glowing pro-EU rhetoric that makes the market rise (until someone in Germany says something).  

It's a typical case of .DE said, SH.Eu said and all the kiddies can do is hide in their room until Mommy and Daddy stop fighting.   

Things were getting silly enough on the plus side as we rallied for no reason at all that we added a very aggressive short position on the Russell using TZA.  My 3:07 comment in Member Chat was:  

Big RUT move makes TZA fairly cheap at $20 and the July $20/24 bull call spread is $1, which makes for a nice hedge and if the RUT pops, you can offset it with the July $18 puts, now .45, for $1 or better or, of course, there's always the TWIL List

We had no long plays to make yesterday as we added them all when the market was much lower (told you so!) and now it has moved to the top of the bottom of our range and we pick up a short – this is not rocket science, folks.  It's going to be a choppy, terrible market until either the EU saves us by tomorrow or we crash and burn horribly and my comment to Members in the Morning Alert at 10:24 was: 

We still need the Dollar to go lower and this morning it's zooming higher (82.80) and keeping us from a better move up on the indexes.  This will go on for the next few days with each syllable uttered by anyone of presumed authority in the EU so – if you can't stand the heat – stay in cash!  

FXE WEEKLYThe Dollar had worked it's way down to 82.50 into the close but now (8am) it's been jammed back to 82.90 as the Euro plunges back to $1.2426 on whatever silly thing someone just said.  Financials are dragging everyone down as they are DOOMED if the EU can't pull things together.

Financials are also hurting as the NY Times Dealbook Blog is reporting that JPM's Trading losses "may reach $9Bn."  I'm a little…
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Monday Market Momentum – Down is the New Up

FXY WEEKLY Thank goodness the US is closed! 

Europe is down a whopping 3.5% (so far) this morning, opening in free fall after Asia opened down about 2% on the average (but finishing at the day’s lows).  Gold flew up to $1,906 before calming down but oil is down to $84.82 at 6:45 am as the Dollar tests it’s highs of 75.15 on the Euro’s fall to $1.41 and the Pound testing $1.61.  Any thoughts that the BOJ was done manipulating the Yen are now officially out the window as the Dollar/Yen is STILL 76.80 (around 128.50 on FXY), the same place it’s been since August 8th! 

When the World’s 3rd largest economy is manipulating it’s currency on a daily basis, of course the Global markets are going to be thrown into chaos.  Every day the BOJ tries to debase their currency they must buy other currencies or foreign stocks or gold or silver or oil – ANYTHING BUT YEN to make the Yen less valuable as compared to another relative basis.  

Even so, it’s not working and Japan’s new finance minister said this morning that he will try to forge a consensus among the Group of Seven leading industrialized countries that "excessive yen rises" won’t benefit the world economy when finance officials meet in France later this week.  "I am hoping to see us develop a common view that excessive yen rises, as shown by facts and processes in the past, do not necessarily have a positive impact on the global economy," Mr. Azumi told reporters, referring to Friday’s planned meeting of G-7 finance ministers and central bank chiefs in Marseille, France.  "At this exchange rate, it is becoming impossible for crucial parts of Japan’s export industry to make profits," he said.

BCS WEEKLY Asian shares were already following US financials downhill on overblown fears of the FHFA lawsuit (see FHFA Friday).  I say overblown because the first bank sued, ING, already settled for .20 on the Dollar so banks are reacting as if they already lost $30Bn when it’s much more likely this will all get washed away for $6Bn, or about 2 day’s worth of profits (4%).  We’ve already seen the banking community write down over $1Tn in losses and survive to screw us over another day – do we really think this little wrist-slap will end them or is this just another example of retail suckers
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Options Trades Nn HSBC Signal Investor Optimism

www.interactivebrokers.com

Today’s tickers: HBC, TEVA, TLB & CAVM

HBC - HSBC Holdings PLC – Shares in the financial services provider increased 2.9% to $50.30 at the start of the trading week on news Europe’s largest bank by market value agreed to sell its upstate New York branch network to First Niagara Financial Group for around $1 billion. The London-based company said it plans to cut $3.5 billion in costs over the next two years by trimming 10% of its workforce and closing offices. HSBC posted better-than-expected first-half earnings ahead of the opening bell this morning. Options players cheered HSBC today by ditching downside protection, selling puts and engaging in light call buying in the front month. Approximately 4.1 put options are changing hands on HSBC for each single call option in action today. Investors expecting shares to exceed $49.00 through August expiration sold roughly 2,300 puts at the August $49 strike for an average premium of $0.74 apiece. Open interest at that strike suggests traders purchased around 2,000 of the Aug. $49 puts on Friday at an average premium of $1.41 each. Put sellers may be purging protective or bearish positions on HSBC post-earnings, or may be selling the puts outright to rake in available premium on the options. Investors engaging in the latter strategy keep the full amount of premium received as long as HSBC’s shares exceed $49.00 through expiration day in a few weeks. Similar put-selling took place at the August $48 strike where some 1,555 puts sold for an average premium of $0.39 a-pop, while 1,000 puts were sold at the August $47 strike at an average premium of $0.19 per contract. Meanwhile, investors expecting shares in the financial services company to continue to rise picked up some 560 in-the-money calls at the August $49 strike at an average premium of $1.35 each, and purchased around 620 calls at the August $50 strike for an average premium of $0.68 apiece. Call buyers profit at expiration if shares in HSBC rally above…
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Options Strategist Positions for a United Continental Rally

www.interactivebrokers.com

Today’s tickers: UAL, HBC, ALTR & GPS

UAL - United Continental Holdings, Inc. – A three-legged options combination play on United Continental suggests one strategist expects the price of the underlying to rebound by June expiration. Shares in UAL are down 2.25% at $20.75 as of 12:05pm in New York trade. The contrarian player is positioning for the medium-term rally by lowering the cost of buying a debit call spread with the sale of out-of-the-money put options. The trader sold 10,000 puts at the June $19 strike, to buy the 10,000-lot June $22/$26 call spread, for which he received a net credit of $0.10 per contract. The investor at least keeps the net credit as long as shares in UAL exceed $19.00 through expiration day. Additional profits are available to the bullish trader in the event that United Continental’s shares reverse course to rally 6.0% over the current price of $20.75 to trade above $22.00 in the next couple of months to expiration. Including the net credit, the investor may pocket maximum potential profits of $4.10 per contract on the transaction if the price of the underlying stock jumps 25.3% to exceed $26.00 at expiration in June.

HBC - HSBC Holdings PLC – It looks like one options investor raised bullish expectations on Europe’s biggest bank this morning with shares in HSBC Holdings currently trading 1.0% higher on the session at $54.44 as of 11:25am. The financial services provider’s shares were higher in European trading as well on sentiment that upcoming results from a government-sponsored Independent Commission on Banking will be less thorny than some investors initially anticipated. The trader responsible for the majority of options volume generated on HBC thus far today appears to be rolling a previously established bullish stance up to the next available strike price in the…
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Bull Constructs Three-Legged Spread on Beazer Homes USA

www.interactivebrokers.com

 Today’s tickers: BZH, HBC, MON, EBAY, ELX & PMCS

BZH - Beazer Homes USA, Inc. – A three-legged options combination play initiated on the homebuilder that designs, sells and builds single-family and multi-family homes in the U.S. indicates one strategist sees shares improving ahead of August expiration. Shares in Beazer Homes USA rose 1.5% this afternoon to $5.99 in the final hour of the session. The homebuilding company will reveal its performance for the first quarter before the market opens for trading on February 4, 2011. The investor responsible for the bullish spread sold 5,000 puts at the August $4.0 strike for a premium of $0.25 each, purchased 5,000 calls at the August $6.0 strike for a premium of $1.05 a-pop, and sold the same number of calls at the higher August $7.0 strike at a premium of $0.60 apiece. The net cost of putting on the trade amounts to $0.20 per contract. Thus, the trader stands ready to make money should shares in BZH rally 3.5% over the current price of $5.99 to surpass the effective breakeven point to the upside at $6.20 by expiration day. Maximum potential profits of $0.80 per contract are available to the trader if the homebuilder’s shares surge 16.9% to trade above $7.00 by the time the contracts expire in August. Selling the upper-strike calls as well as the out-of-the-money put options greatly reduced the cost of taking a bullish stance on the stock. The sale of the August $4.0 strike put options suggests this trader is more than willing to bear the risk of having 500,000 shares of the underlying stock put to him at $4.00 each should the puts land in-the-money at expiration.

HBC - HSBC Holdings PLC – Some investors trading options on the financial services firm are positioning for the price of the underlying to appreciate in the next couple of months, while others appear to be taking profits off the table today. Shares in London-based HSBC Holdings increased as much as 4.9% during the current…
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Yentervention Wednesday – Kan Baffles Bulls

Kaaaaaaannnnnn! 

As we discussed yesterday, it was meet the new boss, same as the old boss in Japan as Naoto Kan’s re-election sent the Yen to new highs as he was considered the least likely candidate to back intervention.  Well surprise, surprise this morning as Japan officially intervened in the FOREX markets and sent the Yen down a full 2.5% as they used their Yen to purchase an undisclosed basket of currencies.   

Since the Dollar is up today against both the Pound ($1.55) and the Euro ($1.29), we can assume the dollar is one of those currencies and demand for Dollars means upward pressure on rates so that should be the end of the TLT bounce for the moment.  Stock boys want bonds to die so the money can come this way and bond boys want you to fear the stock market so you will let them hold your money (and charge you fees) at ridiculously low rates of interest.  That’s they Yin and Yang of the markets. 

Investors were starting to doubt the government’s commitment to its pledge that it would take bold action,” said Yoshimasa Maruyama, a senior economist at Itochu Corp. in Tokyo. Kan and Noda in recent weeks repeatedly said that Japan was ready to take “bold” measures to stem the currency.  The Japanese government official said European and U.S. officials were informed of the move in an effort to avoid a negative reaction. It took a while to convince Europe because authorities there didn’t like the idea, the person said.

We’ll see if the stronger Dollar today puts pressure on commodities but we’re in pretty good shape as this rally, for a change, has not been led by commodities as the market is now flat to the August despite an 8% drop in oil prices (see USO on chart):

I often complain about rallies that are led by Financials and Commodities as those are things that suck money OUT of the economy and are not long-term drivers of growth.  The entire 2006-7 rally was this kind of rally and I bitched about it all the way up.  We also had housing back then, another type of commodity, but that’s so dead now it’s hardly worth mentioning, is it?  Actually housing is where we used a lot of commodities like lumber and copper etc.  33 months after the onset of the Great Recession, new home sales are still down 70% and non-residential construction is down 36% – that market is dead, dead, dead

We get housing starts next week but who really cares? …
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Monday Mark-Down – For the Dollar!

$70 OilThe dollar is off 2% since Friday.

That is sending oil back over $70 and gold back to $960 and has jacked the futures up 1% as the "value" of stocks tries to keep up with the less valuable dollars that they are exchanged for.  People often forget that stocks are a commodity too and are also exchanged for currencies – when the dollar falls, at least initially, stocks tend to rise.  Unfortunately so do our commodity costs but, as we saw in last week’s data, wages do not keep up and that, sadly, leads to a deflation of consumer buying power

Every $10 increase in the price of a barrel off oil rips $25Bn a month out of the hands of global consumers, enough money to employ 6M people a year at $50,000 each.  Those jobs are torn away from other sectors as discretionary income goes to commodities and, by the time you add in refining mark-ups and the cascading effects on other raw material cost, the effect of a $10 per barrel rise in oil is doubled to what amounts to about 1M global jobs per dollar. 

What we are seeing is the result of the inaction against GS and other commodity manipulators as they breezed through Congressional hearings, aided throught he process by a massive market rally that kept their nonsense off the front page.  Who cares if GS made a few extra bucks if the market is up 10% in a month?  We’ll see if the resurging energy and commodities sectors can provide the catalyst to move the S&P up over the 1,000 mark, a level we haven’t seen since the September crash, almost a year ago but also the last time the dollar index was below 78 so everything is coming full-circle, right back to the conditions that crashed us last time! 

This is not to say we are going to fight the tide.  In the Summer of 2008 oil was around $120 a gallon and the Dow was around 11,500 from June through September before plunging 35% in the second leg of the crash.  If the market is determined to climb back up that cliff and try again, we need to at least head on the fact that they might make it all the way back to the top – especially with help from heavyweights like Alan Greenspan, who knocked the dollar
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Earthlink calendar spreader maintains pessimistic stance

www.interactivebrokers.com

Today’s tickers: ELNK, HBC, CECO, XLE, C, CMCSK, SWKS & ARNA

ELNK Earthlink , Inc. – The internet service provider has experienced a 5% decline in shares today to $6.29. ELNK popped onto our ‘hot by options volume’ market scanner after one investor initiated a calendar roll. At the March 7.5 strike price 5,200 puts were sold for a premium of 95 cents each, while at the April 7.5 strike price 5,200 puts were purchased for 1.15 per contract. Maybe this investor sees Earthlink continuing to fall through next month, and therefore has rolled his in-the-money long-put position previously established in March into the next month’s contract.

HBC HSBC Holdings Plc ADS – As with many other financials today, shares of HBC have rallied 4% to $27.05. One trade of interest occurred at the March 30 strike price where an investor appears to have purchased a straddle by picking up 7,500 calls for 15 cents apiece and 7,500 puts for 3.20 per contract. You may be thinking, given where shares are with today’s rally – why on earth would someone pay a combined premium of 3.35 in the hope that shares of the bank swing to either breakeven point located at $33.35 on the upside and at $26.65 on the downside? While it is possible that this investor’s motivation for the trade is to see profits amass on falling share price, we believe there may be a different explanation. Perhaps this trader had previously sold the options leaving him short and now he is buying back the contracts in order to close out his short position. It appears that about 7,500 of the existing open interest for calls and puts at the March 30 strike was built up between February 5th and 6th. Thus, we propose that this investor may have originally sold the straddle in February and is not buying it back before the March contract expires on Friday.

CECO Career Education Corporation – Shares of the global education company have fallen 12% to $20.24. CECO is an on-ground provider of education at various levels and also has a significant presence in online education. The company edged onto our ‘hot by options volume’ market scanner after one investor established plays in the March and April contracts. At the March 22.5 strike price it appears that one investor initiated a credit spread by purchasing 5,000 calls for 38 cents apiece…
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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!

 
 

Phil's Favorites

Expect higher treasury yields in second half

Expect higher treasury yields in second half

Courtesy of Sober Look

While many investors refuse to accept this fact, we are clearly marching toward higher treasury yields later in the year and in 2015. Even after today's bond selloff, we are still around the yield levels we had during the dark days of the government shutdown. Here are a couple of key factors that will drive yields higher from here.

1. Many are pointing to record low yields in Europe (see chart), suggesting that on a relative basis treasuries look attractive. Perhaps. But it's important to make that comparison based o...



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Zero Hedge

Russia And Germany Allegedly Working On Secret "Gas For Land" Deal

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While many were amused by this photo of Putin and Merkel during the world cup final showing Europe's two most important leaders siding side by side, some were more curious by just what the two were scheming:

 

Thanks to the Independent, we may know the answer, and it is a doozy, because according to some it is nothing shy of a sequel to the ...



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Insider Scoop

Warren Resources Enters Marcellus with Citrus Asset Buy - Analyst Blog

Courtesy of Benzinga.

Independent energy company, Warren Resources, Inc. (NASDAQ: WRES) announced that it has acquired certain assets in Pennsylvania's Marcellus Shale from Colorado-based oil and natural gas producer, Citrus Energy Corporation and two other parties that owned working interest in the region. The transaction, which marks Warren Resources' entry into the prolific natural gas basin, was for a purchase price of $352.5 million.

Following this announcement, shares of Warren Resources gained around 2.6% to close at $6.30. Shares also touched an intraday high of $6.70 that marked a new 52-week high for the stock.

The company mentioned that it will issue $40 million in shares at $6.00 per share as part of the transaction cost. The...



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Chart School

3 Things Worth Thinking About (Volume 2)

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Last week, I started a new weekly series entitled "3 Things Worth Thinking About". The focus here will be three things, ironically enough, that are worth considering with respect to your portfolio and related investments. As I have discussed many times previously, focusing only on "bullish" commentary when markets are rising is really of little use as it creates a "blind spot" to related investment risks. The same goes for when markets are falling. These cognitive biases get in the way of making logical and disciplined investment decisions to not only garner returns when markets rise, but avoid depletion of capital when they don't.

I hope you will...



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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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Option Review

Kellogg Call Options Active Ahead Of Earnings

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...



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Sabrient

Sector Detector: Bold bulls dare meek bears to take another crack

Courtesy of Sabrient Systems and Gradient Analytics

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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OpTrader

Swing trading portfolio - week of July 28th, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW in the comments below each post. 

Our weekly newsletter Stock World Weekly is ready for your enjoyment.

Read about the week ahead, trade ideas from Phil, and more. Please click here and sign in with your PSW user name and password. Or take a free trial.

We appreciate your feedback--please let us know what you think in the comment section below.  

...

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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

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...



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Pharmboy

Biotechs & Bubbles

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...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

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.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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