Shares in Hewlett-Packard (Ticker: HPQ) popped more than 3.0% to a new 52-week high of $29.82 this morning on an upgrade to ‘buy’ from ‘neutral’ with a price target increase to $39.00 from $29.00 at Bank of America Merrill Lynch.
The stock rose almost 90% during 2013, starting the year at $14.79 and closing it out at $27.98. Activity in August expiry options today suggests one trader is positioning for the price of the underlying to soar again during 2014. It looks like the strategist purchased a 2,000-lot Aug $34/$38 bull call spread at an average net premium of $0.74 per contract. The trade starts making money if shares in HP rally 16.5% over today’s high of $29.82 to exceed the breakeven price of $34.74, with maximum potential profits of $3.26 per contract available on the spread in the event that shares jump 27% to $38.00 by August expiration. Shares in Hewlett-Packard last traded above $38.00 in May of 2011.
GES – Guess? Inc. – Shares in apparel and accessories retailer Guess are trading lower on Wednesday ahead of the company’s third-quarter earnings report after the closing bell. Options changing hands on the stock during morning trading indicates some traders are bracing for shares to potentially drop to the lowest level since early-October by December expiration. The stock currently trades down 2.0% on the day at $33.24 just before 11:30 a.m. EST.
Around 1,700 of the Dec $29 strike put options have changed hands on GES so far today, more than two times the open interest level at that strike of 780 contracts. Time and sales data suggests most of the $29 puts were purchased at a premium of $0.40 each, positioning buyers to make money if shares in Guess drop 14% from the current price of $33.24 to breach the breakeven point at $28.60 by December expiration.
Options volume on the retailer is roughly five times the average daily level ahead of the company’s earnings release, with volume currently up above 5,400 contracts versus average daily volume of around 1,060 contracts.
HPQ – Hewlett-Packard Co. – Options on HP are active today, with the price of the underlying stock climbing as much as 4.3% to a new 52-week high of $28.70 during morning trading. Overall options volume on Hewlett-Packard, currently hovering near 55,000 contracts as of the time of this writing, is more than 75% of the stock’s average daily volume of around 70,000 contracts. Trading in calls on the stock is far outpacing that of puts, with the call/put ratio hovering near 5.0 as of 11:20 a.m. EST.
HPQ – Hewlett-Packard Co. – Shares in HP are down roughly 1.8% at $20.87 on Monday amid a down day for U.S. stocks, as the partial U.S. government shutdown extends into its second week.
Trading traffic in weekly put options on the maker of printers and PCs indicates one strategist is positioning for the price of the underlying to potentially drop to the lowest level since April by expiration. It looks like the trader purchased a 2,000 lot Oct 11 ’13 $19.5/$20.5 put spread for a net premium of $0.19 per contract. The bear put spread starts making money below a breakeven price of $20.31, and could generate maximum potential profits of $0.81 per contract in the event that HP’s shares drop 6.5% from the current price of $20.87 to settle at $19.50 at expiration.
Shares in Hewlett-Packard are down roughly 25% since the beginning of August. The company will hold the HP Securities Analyst Meeting 2013 on Wednesday starting at 8:00 a.m. PT.
HPQ – Hewlett-Packard Co. – Options on Hewlett-Packard are among the most active as measured by volume on Wednesday, with heavy trading in upside calls on the stock. Shares in HPQ are currently off 0.10% on the session at $21.29 as of 1:00 p.m. ET, reversing an earlier gain of 1.4% that saw the stock touch an intraday high of $21.615.
The most traded options on HPQ today are the Oct 18 ’13 $22 strike calls, with upwards of 36,000 contracts in play against open interest of around 15,300 contracts. Time and sales data indicates most of the calls were purchased at a premium of $0.44 each; the single-largest print being 27,564 calls that traded just after 10:15 a.m. ET. The calls may be profitable at expiration if shares in HPQ rally more than 5.0% over the current price of $21.29 to exceed the effective breakeven point at $22.44. Shares in Hewlett-Packard last closed above $22.44 back on August 29th.
Overall options volume on HPQ is approaching 69,000 contracts as of the time of this writing, which is more than twice the stock’s average daily volume of around 32,000 contracts. Heavy trading in calls on the stock finds the call/put ratio hovering above 7.5 in early afternoon trading.
HPQ – Hewlett-Packard Co. – Trading in January 2014 expiry put options on HPQ this morning suggests one strategist may be positioning for shares in the tech giant to weaken further during the next five months. Shares in Hewlett-Packard Co. are off their lows of the session, down 0.40% at $22.18 as of 12:10 p.m. ET. The stock has dropped 20% since the beginning of August, though shares are still up more than 50% year to date. One trader bracing for shares to move lower appears to have purchased 6,000 in the money put options at the Jan 2014 $24 striking price at a premium of $3.20 per contract. The puts make money at expiration if shares in HPQ decline another 6.0% from the current price of $22.18 to breach the effective breakeven point on the downside at $20.80. Shares in the name last traded below $20.80 at the end of May.
YHOO – Yahoo! Inc. – Weekly options changing hands on Yahoo today suggest some traders are positioning for a near term pop in the price of the underlying, while other strategists brace for selling pressure to persist during the next few trading sessions. Shares in YHOO are down 2.0% at $27.15 as of 12:30 p.m. ET. Options players looking for shares in the name to rebound appear to have purchased more than 400 in the money calls at the Aug 30 ’13 $27 strike for an average premium of $0.42 apiece. Call buyers may profit at expiration this week if shares in Yahoo rise 1.0% over the current price of $27.15 to settle above the average breakeven price of $27.42. Conversely, traders snapping up more than 750 of the Aug 30 ’13 $26.5 strike put options for an average premium of $0.08 per contract today are prepared to…
HPQ - Hewlett-Packard Co. – Bullish options are changing hands on PC and printer maker, Hewlett-Packard Co., this morning, with shares in the name up sharply on comments from CEO, Meg Whitman, at the company’s Discover Conference in Las Vegas. Shares are currently up the most in the Dow Jones Industrial Average, trading higher by 3.1% at $25.00 as of 11:50 a.m. ET. The stock earlier rallied more than 5.0% to touch a new 52-week high of $25.49. Traders positioning for shares in HPQ to extend gains during the next couple of trading sessions snapped up weekly calls on the stock straight out of the gate this morning. The most active weekly calls by volume are the Jun 14 ’13 $25.5 strike contracts, with around 3,200 calls traded before midday in New York. It looks like most of the calls were purchased, with roughly 1,000 of the total volume picked up by one strategist at a premium of $0.23 each. The trader stands ready to profit at expiration should shares in the HPQ settle above the breakeven price of $25.73. The Jun 14 ’13 $26 strike calls are also active today, with around 350 lots purchased at an average premium of $0.08 apiece.
VFC - VF Corp. – Shares in the owner of a portfolio of well-known apparel and footwear brands, including The North Face, Timberland and Seven for All Mankind, rallied 0.80% to a new all-time high of $189.60 this morning following the company’s Investor Day conference on Tuesday. VF Corp. yesterday outlined revenue and growth targets and strategic initiatives. Analysts at Janney Montgomery Scott maintain a ‘Buy’ rating on the stock and raised their target price to $210.00 from $188.00. Fresh interest in July expiry puts on VFC this morning suggests one or more options traders are bracing for the price of the underlying to potentially decline during the next five weeks. The most actively traded contracts today are the Jul $180 puts, with upwards of 1,000 contracts in play versus…
XLU - Utilities Select Sector SPDR – A large trade in XLU puts yesterday suggests at least one options market participant is preparing for the strong run in the price of the underlying to run out of juice in the near future. Shares in the Utilities Select Sector SPDR ETF are up 0.20% today at $41.00, on the heels of a 17% move to the upside since the end of 2012. The biggest print in XLU options yesterday was the purchase of a block of 50,000 Jun $40 strike puts at a premium of $0.51 each. The bearish strategy starts making money if the price of the underlying slips 1.2% from the current price of $41.00 to breach the breakeven point on the downside at $40.49.
HPQ - Hewlett-Packard Co. – Weekly calls changing hands on Hewlett-Packard today look for shares in the name to rally in the near term. The stock is up 3.0% this afternoon to stand at $20.24 as of 12:25 p.m. ET. Shares in HPQ had been on a tear, rallying more than 60% during the first three months of 2013 to a six-month high of $24.05 on April 1st. Since then, however, the computer hardware maker’s shares have declined roughly 15% to reach the current level. Options traders positioning for shares to move higher next week appear to be buying the May 03 ’13 $20 and $21 strike calls this morning. It looks like traders snapped up 2,600 of the $20 strike calls at an average premium of $0.33 each and around 3,200 of the $21 strike calls for an average premium of $0.16 apiece. Call buyers stand ready to profit at expiration next week in the event that shares in HPQ exceed average breakeven points at $20.33 and $21.16, respectively. HPQ reports second-quarter earnings after the close on May 21st.
HPQ - Hewlett-Packard Co. – An upgrade to ‘Overweight’ from ‘Equal Weight’ with a price target of $27.00 at Morgan Stanley this morning is helping shares in Hewlett-Packard rise to the highest level since May of 2012. Shares in HPQ, up roughly 100% since touching down at a multi-year low of $11.35 in November, rallied 2.5% on Monday morning to trade at $22.72 as of 11:30 a.m. ET. Perhaps seeking to lock in HPQ’s strong gains during the past five months, some options traders appear to be snapping up protective puts on the stock. Notable volume in the May $23 strike put options changed hands during the first half of the trading day, with volume topping 5,400 contracts versus previously existing open interest of 297 lots. It looks like most of these in-the-money contracts were purchased in the early going at an average premium of $1.28 apiece. Profits, or downside protection, on the strategy kick in if shares in Hewlett-Packard drop 4.4% from the current price of $22.72 to breach the average breakeven point on the downside at $21.72 by May expiration.
EBAY - eBay, Inc. – Bullish options looking for shares in the online marketplace operator and payment services provider to reverse recent losses are active today. The stock is down 1.0% on the day at $49.90 as of 11:50 a.m. in New York, on the heels of a more than 12% pullback in the price of the underlying from the stock’s 52-week high of $57.27 set back in February. Trading traffic in weekly calls on eBay suggests some traders are preparing for shares in the name to rebound this week, with upwards of 2,600 lots in play at the Mar. 22 ’13 $52.5 strike versus open interest of 1,122 contracts. It looks like most of the call options were purchased earlier in the session at an average premium of $0.08 each. Call buyers may profit at expiration this week in the event that EBAY shares rally 5.4% over the current…
HPQ - Hewlett-Packard Co. – Shares in HPQ fell to their lowest level in a decade on Tuesday after the company announced fourth-quarter results that missed analyst expectations for sales and included an $8.8 billion impairment charge related to its Autonomy business. Options on the PC maker are seeing heavy volume amid an ugly selloff in the price of the underlying, currently trading down 11% at $11.84 as of 12:35 p.m. ET. Nearly 250,000 call and put options have changed hands on the stock versus the average daily options volume of 47,726 contracts. Calls are slightly more active than puts, with the call-to-put ratio hovering around 1.1 in early-afternoon trading. Weekly calls, specifically the Nov. 23 ’12 $12 strike contracts, attracted particularly heavy trading traffic today. It looks like some strategists are betting the stock could rebound somewhat off its post-earnings report lows by the end of the week. Upwards of 23,000 of the $12 strike weekly calls traded in the first half of the session today against open interest of just 696 contracts. It appears most of these contracts were purchased for an average premium of $0.10 apiece, and may mean some options market participants are placing cheap near-term bullish bets on the computer maker. Traders long the weekly contracts make money as long as shares in HPQ increase 2.2% over the current price of $11.84 to settle above the average breakeven price of $12.10 at expiration.
KKD - Krispy Kreme Doughnuts, Inc. – It’s a sweet day for investors in Krispy Kreme Doughnuts, Inc., with shares in the name soaring 22.5% on the back of better-than-expected third-quarter earnings to the highest level in more than a year. Shares in the doughnut maker are off earlier highs, but continue to trade up approximately 20% on the session at $9.04 as of 11:50 a.m. ET. Buyers of bullish options on Krispy Kreme yesterday prior to the earnings report are enjoying sizable overnight…
As you can see from David Fry's SPY chart, we went up and finished down but the volume was a bit lower to the upside than the sell-off into the close. MSFT and INTC led us to the downside – no surprise really as we discussed both this weekend as Dow components to avoid in the current cycle.
There was no significant economic data, just the usual nonsense about Greece and, of course, the drumbeat of fear regarding the US fiscal cliff that the MSM is banging 24/7. "What's up with that fiscal cliff" is now how 90% of my conversations begin with anyone who knows what I do for a living.
I now find that it's easier to say "Oh, we're all totally doomed" than to explain why we're not because when, for example, I say this to one of my Mother's friends – they nod wisely and agree with me while, if I try to explain why they shouldn't worry so much – they get all confused and then say to my Mom – "I thought he was supposed to understand the stock market."
I guess I should have tried this with my children. Rather than sitting up for 15 minutes or so explaining why there are not monsters under their bed – I could have just agreed with them and said "Yep, big hungry ones!" Maybe they'd never sleep again but at least I'd sound knowledgeable about monsters and the imminent dangers they posed to sleeping children.
Stocks are now at 3-month lows and it's been a month since we strung together 2 up days in a row (Oct 15-17) with the S&P falling from 1,470 on Oct 5th to yesterday's low of 1,371 fir a 99-point drop in 25 trading sessions (6.8%) – losing an average of 4 S&P points a day with 1,360 being our Must Hold line on the Big Chart. The S&P and the NYSE are both, so far, holding their lines (NYSE is 8,000) and they are our broadest indexes but we're pretty close to having to layer our disaster hedges as we cross those -7.5% lines.
In today’s Outside the Box, Lacy Hunt and Van Hoisington of Hoisington Investment have the temerity to point out that since the Great Recession officially ended in 2009, the Federal Open Market Committee (FOMC) has been consistently overoptimistic in its projections of US growth. They simply expected QE to be more stimulative than it has been, to the tune of about 6% over the past four years – a total of about $1 trillion that never materialized.
Given that dismal track record, our authors ask why we should believe the Fed’s prediction of 2.9% real GDP growth for 2014 and 3.4% for 2015 – particularly with QE being tapered into nonexistence.
Kevin Gosztola over at Firedoglake does some excellent work, and his latest story about the recent activities of perjuring Director of National Intelligence for the U.S., James Clapper, is no exception. To provide a little context, the Washington Post ...
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I have been saying this for a while: You can't have a housing recovery unless actual home buyers are involved.
We are very far away from seeing the housing market reach its 2005 highs ... and as time passes, it becomes clearer that this generation may never see them again.
How can I say that?
What we have seen in the housing market since then, but mostly since 2012, in my opinion, is nothing more than a dead-cat bounce scenario -- an increase in prices after a massive decline. The chart below shows how far off we are from the housing prices of 2005.
Bunge Limited (BG) is the world’s largest processor of soybeans. It is also a major producer of vegetable oils, fertilizer, sugar and bioenergy.
When commodities got hot in 2007-08, Bunge’s EPS shot up and the stock followed, rising 185% in 19 months.
The Great Recession took its toll on operations, dropping EPS to a low of $2.22 in 2009. Since then profits have recovered. They ranged from $4.62 - $5.90 in the latest three years. 2014 appears poised for a large increase. Consensus views from multiple sources see BG earning $7.04 - $7.10 this year and then $7.83 - $7.94 in 2015.
Shares in Las Vegas Sands Corp. (Ticker: LVS) are up sharply today, gaining as much as 5.7% to touch $80.12 and the highest level since April 4th, mirroring gains in shares of resort casino operator Wynn Resorts Ltd. (Ticker: WYNN). The move in Wynn shares appears, at least in part, to follow a big increase in target price from analysts at CLSA who upped their target on the ‘buy’ rated stock to $350 from $250 a share. CLSA also has a ‘buy’ rating on Las Vegas Sands with a $100 price target according to a note from reporter, Janet Freund, on Bloomberg. Both companies are scheduled to report first-quarter earnings after the closing bell on Thursday.
Yesterday, the market continued its winning ways for the fifth consecutive day. The S&P 500 closed within 1% of its all-time high, and the DJI was even closer to its all-time high. Healthcare, Energy and Technology led the sectors while Financials, Telecom, and Utilities finished slightly in the red. All three sectors in the red are typically flight-to-safety stocks, so despite lower than average volume, the market appears poised to make new highs.
Mid-cap Growth led the style/caps last week, up 2.87%, and Small-cap Growth trailed, up 2.22%. This week will bring well over 100 S&P 500 stocks reporting their March quarter earn...
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[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...
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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Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
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