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…
JCP - J.C. Penney Co., Inc. – Frenzied options trading ensued following reports that Ron Johnson, head of retail at Apple Inc., was named CEO of J.C. Penney Co. The news drove shares in the department store operator up 19.5% to $35.97by 1:40 pm in New York. The number of options in play on JCP today is approaching 171,000 contracts in afternoon trade, topping overall open interest on the stock of 160,338 contracts.Johnson’s appointment to JCP seems to have injected traders with a renewed sense of optimism on the department store owner. The previous four weeks were not kind to shares in J.C. Penney, which declined 27.3% since mid-May to $29.82 this past Friday.
Investors are exchanging roughly 1.6 call options on JCP for each single put option in action. June and July contract calls are the most active with in- and out-of-the-money call buying a seemingly popular strategy amongst traders. Investors who picked up calls a few hours ago at the start of the rally paid far less than the current asking price on the options in most cases. June $30 strike calls, for example, were purchased around 1,100 times earlier in the session for an average premium of $1.79 each. The now deep in-the-money calls currently tout a hefty price tag of $5.90 per contract. Trading traffic in options expiring this Friday ballooned during the session. Call volume at the June $32strike, the most at any single strike in the front month, is greater than 12,500 contracts against previously existing open positions of 3,818 contracts. Early-birds paid an average premium of around $0.46 per contract for those calls, which now have an asking price of $3.90 a-pop. July contract calls drew crowds, as well. The July $35 and $36 strike…
This isn’t complicated people – what’s the 2.5% line off of $103? $100.425. That’s where we’ll look for oil to consolidate but below that line we’ll be comfortable with our shorts again, looking for those next legs down to $98.88 (down 4%) and then $97.85, where we will once again look for a 20% retrace to $98.88 and then a nice short there when it fails. So come on – you can play along at home – don’t miss out on making the next $1.129Bn!
Meanwhile, what’s a 20% bounce off a $3 drop? 60 cents, right? Where did oil bounce to in the futures? $100.60? This is not rocket science folks… We teach these little tips to our Members every day at Philstockworld. Sure you may find it disturbing that the chart we drew up (above) in early April is hit almost to the penny on the NYSE yesterday (2 months later) as it halted right on our red line – but that just shows us that Bots are running this market (as we keep telling you) and it also means that we can rely on our ranges and that makes it EASY to make good trading decisions.
Also in Member Chat last night, I reviewed 8 short put ideas (bullish) that can net us over $3,000 in 15 days if we get a bounce and hold our "Must Hold" levels. This is the nice thing about hedging – we make money on the way up OR on the way down and, when we are trading in a range – like we hopefully will this summer – then we make money both ways on a regular basis! Let the market manipulators play their…
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There were so many good things to read this past week that it was hard to narrow them down to a topic group. After a brief respite early this year, the markets are hitting new highs confirming the current bullish trend. As a money manager, this requires me to increase equity exposure back to full target weightings. After such an extended run in the markets, this seems somewhat counter-intuitive. It is, but as Bill Clinton once famously stated; "What is...is."
However, while the current market "IS" within a bullish trend currently, it doesn't mean that this will always be the case. This is why, as investors, we must modify Clinton's line to: "What is...is...until it isn't." That thought is the fou...
Perhaps it is time to finally admit that anyone who thought Putin's Tuesday press conference, which the market so jubilantly assumed was a case of "blinking" and de-escalating tensions with the west, was wrong. If there is still any confusion, following yesterday's news that Gazprom officially threatened Ukraine with cutting off its gas supplies, as well as the storming of a Ukraine base by Russian troops - luckily with no shots fi...
Nidec Corporation (NYSE: NJ) announced Friday that the Board of Directors of the Company, at a meeting held on March 8, 2014, made the following decisions regarding a stock split and an amendment to the Company's Articles of Incorporation, as well as a modification to the Company's share repurchase program, which was adopted at the meeting of the Board of Directors on January 22, 2014.
1. Purposes of the Stock Split
The Company has decided to implement the stock split to enhance the liquidity of the Company's common stock and expand its investor base by reducing the trading price per share of the Company's common stock.
2. Outline of the Stock Split
(1) Method of the Stock Split
Each of the shares of the Company's common stock held by shareholders included or...
Who says QE is ineffective? If you’re an owner of real estate or financial assets, it’s pretty darn f*cking effective.
From the Wall Street Journal:
The net worth of U.S. households and nonprofit organizations rose 14% last year, or almost $10 trillion, to $80.7 trillion, the highest on record, according to a Federal Reserve report released Thursday. Even adjusted for inflation using the Fed’s preferred gauge of prices, U.S. household net worth—the value of homes, stocks and other assets minus debts and other liabilities—hit a fresh record.
The Global X Social Media Index ETF (Ticker: SOCL) touched fresh record highs on Thursday morning, surprising no one given the top three holdings of the Fund are Hong Kong-based Tencent Holdings (12.678%), Facebook Inc. (12.506%) and LinkedIn Corp. (8.166%), which are up 130%, 160% and 22%, respectively, since this time last year. The SOCL reflects the performance of companies involved in the social media industry, including companies that provide social networking, file sharing and other web-based media applications. Shares in the ETF rose 1.3% today to a new high of $23.00, and have soared approximately 65% since this time last year.
Today brought three better than expected economic releases from Construction Spending, ISM Manufacturing, and Personal Income. The ISM figure was quite unexpected and Personal Income was well above expectations. If we ignore for a moment that the Final GDP reading for Q4 was lowered on Friday (which may or may not have been primarily caused by severe weather), we have had a week of better than expected economic numbers. Corporate earnings have also continued to exceed forecasts, albeit with a bit more cautious guidance.
Of course, none of that matters when the “war drums” start beating. Russia and the Ukraine are engaged in a serious game of “chicken” with a bear in the hen house. The Russian ruble has borne the brunt of the damage so far with a double digit drop today again...
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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.
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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...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
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