Shares in J.C. Penney Co. Inc. (Ticker: JCP) are on the rise today, up 2.7% on the session at $9.60 ahead of the troubled retailer’s second-quarter earnings report after the closing bell. Options volume is above average prior to the release, with nearly 60,000 contracts in play on the name versus average daily volume of around 48,000 contracts. Trading in put options on JCP is outpacing that in calls as of the time of this writing, with the put/call ratio hovering near 1.4 at last check. The most traded put options on J.C. Penney so far today are the Aug 15 ’14 8.5 strike puts after roughly 20,000 of those contracts were sold at a premium of $0.15 per contract near the start of the trading session. Put sellers walk away with the full amount of premium at expiration this week as long as the options expire out-of-the-money with JCP shares trading above $8.50. If JCP earnings fail to impress and shares fall, however, put sellers risk having stock put to them at an effective price of $8.35 each if the options are exercised, or risk needing to potentially buy-to-close the put position at a higher premium to avoid taking delivery of the underlying stock prior to expiration. Finally, the Aug 22 ’14 9.5 strike puts are also active this morning with around 9,000 contracts in play, but most of these options appear to have been purchased at an average premium of $0.65 each.
J.C. Penney Co. shares are bucking the trend on Friday morning, trading up 2.7% at $9.64 amid a down day for equities. Fresh interest in September expiry call options on the beleaguered department store operator suggest one or more traders are positioning for the price of the underlying to potentially rally sharply during the next seven weeks.
The most traded series in JCP options are the Sep 12.0 strike calls, with upwards of 16,000 contracts in play against open interest of just 758 contracts. Time and sales data suggests most of the volume was purchased at a premium of $0.13 each within the first 10 minutes of the opening bell. Call buyers may profit at expiration next month if shares in JCP soar 26% over the current price of $9.64 to exceed the effective breakeven price of $12.13. Shares in the name last traded above $12.13 in September 2013. J.C. Penney is set to report second-quarter results after the close of trading on August 14th.
Options volume on troubled retailer J.C. Penney Co. (Ticker: JCP) exploded Thursday morning to top 230,000 contracts during the first hour of the trading session, which is nearly three times the stock’s average daily reading for the metric. The surge in options activity on JCP accompanies a more than 20% rally in the price of the underlying to $7.50 today after the company reported its first profit in more than two years in the fourth quarter amid signs of progress with the turnaround at the retailer. Shares increased to the highest level since mid-January following Penney’s fourth-quarter earnings report.
The most traded call options on JCP as of the time of this writing are the 21 Mar ’14 7.0 strike calls, with roughly 23,000 contracts in play (this is approximately 70% of open existing interest at that strike of around 33,800 contracts). Time and sales data from this morning suggests most of the volume changing hands at that strike today was purchased at a premium of $0.75 each. Buyers of in-the-money call options could be buying to open near-term bullish positions on the stock or adjusting previously established positions on the heels of the sharp rally in the stock overnight. Traders getting long the calls at $0.75 per contract today may profit at expiration next month if shares in the retailer rally another 3.3% over today’s high of $7.50 to exceed the effective breakeven point at $7.75.
JCP – J.C. Penney Co., Inc. – Trading in weekly options that expire one week from Friday looks for shares in J.C. Penney to continue to push to the upside in the near term. Shares in JCP are up more than 6.0% this morning at a two-month high of $9.95, having rallied approximately 60% off a record low of $6.24 reached back on October 22nd.
Upside calls expiring at the end of next week are active this morning, with fresh interest in the Dec 06 ’13 $10 and $10.5 strike calls looking for the stock to extend gains. Around 3,000 of the $10 strike calls have changed hands so far today against zero open interest, with much of the volume purchased in the early going at an average premium of $0.24 each. Buyers of these contracts stand ready to profit at expiration next week in the event that JCP shares settle above the average breakeven point at $10.24. Volume in the Dec 06 ’13 $10.5 strike calls is pushing toward 700 contracts as of the time of this writing, with much of the interest buying the calls at an average premium of $0.13 each. Traders long the $10.5 strike calls stand ready to profit at expiration next week if shares in the retailer rise 7.0% over the current price of $9.95 to exceed the breakeven point at $10.63.
TSLA – Tesla Motors Inc. – Shares in electric carmaker Tesla Motors are vacillating between negative and positive today, currently down 0.40% at $120.00 just before 11:00 a.m. EST.
Trading in far out of the money put options on TSLA in the early going today suggests one options player may be positioning for shares in the name to continue to decline during the next few weeks. What…
JCP – J.C. Penney Co., Inc. – Options volume on retailer J.C. Penney is above 200,000 contracts at 12:45 p.m. in New York trading, which is more than three times the stock’s average daily options volume of around 61,000 contracts, as shares in the name move sharply to the downside. Shares in JCP fell as much as 16.5% during morning trading to $9.93, the lowest level since December of 2000.
Fresh interest in short-dated options suggests some traders are bracing for the price of the underlying to extend losses this week. Early-bird buyers of weekly puts are in some cases seeing sizable intraday gains in the value of their positions. Buyers of the Sep 27 ’13 $10 strike puts in the early going snapped up around 1,000 contracts for an average premium of $0.11 each. These put options are now worth more than twice as much, with the last-traded price on the $10 strike puts at $0.30 as of 12:45 p.m. ET. More than 6,700 of the Sep 27 ’13 $10 strike puts have changed hands so far today versus open interest of just 287 contracts.
The November expiry put options are the most heavily traded as measured by volume, perhaps as traders look ahead to the company’s third-quarter earnings report. The stock is off session lows, down 13% at $10.34. Options traders are exchanging calls and puts on JCP in roughly equal numbers, with the call/put ratio hovering just above 1.0.
FWM - Fairway Group Holdings Corp. – Shares in food retailer, Fairway, are up slightly on Wednesday, trading 0.20% higher on the session at $20.92 as of 11:25 a.m. ET ahead of the company’s fourth-quarter earnings report on Thursday before the open, Fairway’s first quarterly release since becoming a publicly traded company on April 17th. The stock gained more than 30% to close at $17.50 on its first day trading in the secondary market and has since rallied another 20% to current levels. Fairway popped up on our ‘hot by options volume’ market scanner early in the trading session after one trader purchased front month puts on the stock. It looks like the strategist is bracing for shares in FWM to potentially drop after earnings, buying 40 of the Jun $20 strike puts for a premium of $0.70 per contract. The trade makes money if shares in Fairway decline more than 7.0% from the current price of $20.92 to breach the effective breakeven point on the downside at $19.30 by June expiration. Shares in Fairway last week touched a record high of $22.50.
APA - Apache Corp. – An upgrade to ‘Buy’ from ‘Hold’ with a target share price of $105.00 from $90.00 at Deutsche Bank helped lift shares in Apache this morning, with the stock rising as much as 2.3% during the first half of the session to $86.31.Weekly options in play on Apache today, however, suggests some traders are positioning for the price of the underlying to surrender today’s gains and then some during the next couple of sessions. The energy company’s shares have rallied sharply in recent weeks, up better than 25% in the past six weeks since touching down at a 52-week low of $67.91 on April 22nd. Near-term bearish options are most active at the Jun 07 ’13 $82.5 strike where upwards of 2,000 puts have changed hands against open interest of 259 contracts. It looks like most of the volume was purchased in the early going for…
JCP - J.C. Penney Co., Inc. – Upside call buying in weekly options on J.C. Penney this morning suggest some traders are positioning for shares in the department store operator to rally during the final week of the year. Shares in JCP are up 2.65% at $20.11 as of 11:05 a.m. in New York, but are down more than 40% since the start of 2012. Fresh interest in weekly calls looks for shares in the retailer to extend this morning’s gains when the market reopens after the Christmas holiday. Volume is heaviest at the Dec. 28 ’12 $20 strike, where upwards of 3,500 calls changed hands against open interest of 1,469 contracts. It looks like most of the volume was purchased for an average premium of $0.68 each in the early going. In-the-money call buyers stand ready to profit at expiration this week should shares in JCP rally another 2.8% to top the average breakeven price of $20.68. Bullish positioning spread to the Dec. 28 ’12 $20.5 and $21 strikes, with more than 650 contracts purchased at each strike for average premiums of $0.45 and $0.28 apiece, respectively. Finally, around 275 of the Dec. 28 ’12 $22 strike calls were picked up at an average premium of $0.20 each, thus positioning buyers to profit in the event of a more than 10% move in the share price to $22.20 by expiration.
RPTP - Raptor Pharmaceutical Corp. – Shares in Raptor Pharmaceutical Corp. fell sharply in after-hours trading on Friday after the company said the U.S. Food and Drug Administration needs more time to complete its review of Raptor’s New Drug Application (NDA) for RP103 (PROCYSBI™), a potential treatment for nephropathic cystinosis, according to a press release issued by Raptor on Friday. Shares continue to slide on Monday morning, down 7% at $5.34 as of 11:25 a.m. ET. One or more traders preparing for Raptor’s shares to continue to slide in the New Year snapped up put options in the February expiry. Traders exchanged more than 750 puts at the Feb.…
JCP - J.C. Penney Co., Inc. – The department store operator’s shares had their worst percentage drop in more than two decades on Wednesday after the Company reported a loss for the first quarter, sales that fell more than expected and discontinued its quarterly dividend. The stock trades 17.3% lower this afternoon at $27.54. May expiry options changing hands on J.C. Penney this morning appear to be looking for a modest rebound off the lows by the end of the week. Call buyers snapped up more than 500 of the May $28 strike calls for an average premium of $1.00 each and purchased another 1,700 calls at the higher May $29 strike at an average premium of $0.49 apiece. The May $30 and $31 strike calls attracted buyers as well, with more than 3,000 and 1,600 contracts purchased at each, at premiums of $0.31 and $0.13 each, respectively. Meanwhile, strategists betting shares in JCP are at their lowest for the week sold May $27 and $28 strike put options, pocketing average premiums of $2.96 and $0.15 per contract on the trades. Put sellers walk away with the full amount of premium in hand as long as shares in J.C. Penney settle above $28.00 at expiration. Overall activity in JCP options is up sharply following earnings, with more than 138,000 lots in play versus the stock’s 90-day average options volume of 36,354 contracts.
OSUR - OraSure Technologies, Inc. – Shares in the medical equipment maker hoping to bring the first at-home HIV test to market jumped as much as 35.0% to a more than 5-year high of $12.28 today after a unanimous vote yesterday by an advisory panel was viewed favorably by investors. The FDA is expected to make a decision on the test in the next few months. Calls and puts are changing hands in roughly equal numbers this afternoon and overall volume is currently up above 2,200 contracts…
AOL - AOL, Inc. – Options volume on AOL is up sharply today on news the web services company agreed to sell and license patents to Microsoft in a deal valued at more than $1 billion. The deal drove shares in AOL, Inc. up as much as 46.6% to an intraday- and new 52-week high of $27.00. More than 28,000 options have changed hands on AOL as of 1:00 p.m. in New York, which is roughly 22 times the stock’s 90-day average volume of 1,276 contracts. Options traders positioning for shares in AOL to extend gains in the near term snapped up calls in the front month. Fresh interest building in the April $26, $27 and $28 strikes was largely initiated by buyers. Volume is substantial at the $27 strike, where around 2,250 calls changed hands against 2 open positions. It looks like traders paid an average premium of $0.53 apiece for the options, which may be profitable at expiration as long as shares in AOL rally another 2.0% to surpass the average breakeven price of $27.53 at expiration. Bullish bets initiated back in March certainly seem to be paying off handsomely for some strategists in the aftermath of the run-up in shares. Open interest in the April $19 strike call suggests 200 contracts were purchased for a premium of $0.40 each on March 16th, while another 200 lots were picked up on March 22nd at a premium of $0.25 apiece. These calls currently tout a last-traded price of $7.85, a roughly 20-fold increase over premiums required to purchase the options just a few weeks ago.
JCP - J.C. Penney, Inc. – A long-term bullish options play on retailer, J.C. Penney, Inc., looks for shares in the name to tack on substantial…
David Fry summed up yesterday’s action perfectly, saying "Wednesday’s massive rally was prompted by sudden global central bank intervention adding (printing money) liquidity (reducing the lending rate overseas to zero basically) to shore up sovereign debt in the eurozone. They basically set up a swap facility to do the job in the future. Is it a cure or a bailout? No, this is a handout. And it doesn’t solve the problems the eurozone is facing."
"But, it must be said that the European leaders must have hit a dead end in talks and a potential financial panic must have seemed likely. Mind you, Mr. Bernanke is perfectly comfortable with reflation and money printing. He’s been at it for a long time. It will take years for the Freedom of Information Act to discover how much money and to whom the U.S. has given free money. Americans and others will see price increases in all products and services as a result of a weaker dollar negatively affecting purchasing power. Beyond Moral Hazard issues this is the cost you’ll see and perhaps even wonder why."
It’s the classic "stick save" that was clearly (to us) telegraphed by the very low-volume blow-off bottom last week and now, in retrospect, it is also clear that the market manipulators and their media hounds were pulling out all the stops to get retail investors to SELLSELLSELL.
As I mentioned yesterday, I’ve been railing against the market manipulation and the media nonsense that had been going on each month and today we learn that Wall Street execs did, in fact, meet privately with top Fed officials in September, according to Fed documents, and they "recommended" Central Banks make a joint effort to address the Eurozone debt crisis. Don’t forget that our Fed works for the Banksters, not vice versa! In addition to knowing well in advance this move was coming, their suggestions included boosting the global economy by buying securities, a move that may yet happen as many investors believe yesterday’s swap announcement was a prelude to additional coordinated action.
You see, it’s not enough for Lloyd Blanfein (allegedly and for example, of course, a fine man like Lloyd would never do this) to know that the Fed is going to make a massive move like yesterday – there’s much more money to be made if…
U.S. stock-index futures were little changed, after disappointing results from Alcoa Inc. offset optimism from a winning streak that’s put the Standard & Poor’s 500 Index on track for its best week of the year.
In the last 24 months, Canada, Cyprus, New Zealand, the US, the UK, and now Germany have all implemented legislation that would allow them to first FREEZE and then SEIZE bank assets during the next crisis.
These moves will be sold as “for the public’s good,” when they happen. But the reality is that it’s all about stopping people from moving their capital into actual physical cash.
The whole template for this was set out in Cyprus in 2013. The quick timeline for what happened in Cyprus is as follows:
· June 25, 2012: Cyprus formally requests a bailout from the EU.
Everyone knows that spikes in the S&P 500 Volatility Index, a.k.a. “VIX”, are associated with distress in the equity markets. The recent August decline in stocks was a perfect example of this as the VIX jumped from near 11 to over 50 in just a few weeks with the S&P 500 dropping by more than 10%. As stocks have recovered, the VIX has calmed down. As of Monday, the VIX closed below 20 for the first time since the middle of August. Such returns to “normalcy” in the VIX have typically been associated with a return to calmer times in the equity market. This recent round trip in the VIX got us wondering how reliable of an all-clear signal that has been for stocks historically. So…surprise, we checked it out.
We originally searched for all occasions in which the VIX first returned t...
1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:
The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
I think this is the beginning of the end for the company.
My price target for the stock a year from now is $3, so I shorted more yes...
Bulls can be happy with today's progress. What weakness emerged today was reversed by the close, a change on yesterday's action where sellers dumped in the last few minutes of trading. Volume climbed to register an accumulation day.
The S&P finished at the 50-day MA, but beyond that there is plenty of room beyond that to run to the next level of resistance at 2,045. Technicals are net bullish.
The Nasdaq pushed off its 20-day MA and has another 50 points of maneuver before it gets to its 50-day MA. Technicals are not yet net bullish, but they are close.
Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.
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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).
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.
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...
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.
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