KORS - Michael Kors Holdings Ltd. – Shares in luxury apparel and accessories retailer, Michael Kors Holdings Ltd., are soaring today after the company posted better-than-expected first-quarter earnings and same-store sales and raised its forecast for second-quarter and full year profit. The stock jumped 16% in the first half of the session to an intraday high of $49.12, nearing its post-IPO high of $50.69 reached back in March. One options strategist who initiated a three-legged bullish spread in the September expiry contracts yesterday ahead of the earnings report this morning saw the value of his or her position skyrocket overnight. It appears the trader sold 525 of the Sept. $36 strike put in order to partially offset the cost of buying a 525-lot Sept. $43/$48 call spread. The sale of the $36 puts and the $48 calls reduced the premium required to get long the Sept. $43 strike calls to just $0.70 per contract from the asking price of $2.82 apiece, effectively lowering the breakeven point to $43.70 from $45.82 while limiting profits to a maximum of $4.30 per contract. Shares in the name are currently above $48.00; if the stock exceeds $48.00 at September expiration, the options trader may walk away with the maximum payout available on the spread. Alternatively, the strategist could choose to take substantial profits off the table today or at some future date by buying-to-close the puts and selling-to-close the call spread.
APC - Anadarko Petroleum Corp. – A large call butterfly spread initiated on Anadarko Petroleum Corp. this afternoon suggests one options player is positioning for the price of the underlying to post big gains during the next few months. Shares in the name, up 0.65% on the day at $68.95 as of 12:50 p.m. in New York, have rallied 22% off the June 4th 52-week low of $56.42, though the stock remains down 12% year to date despite the summer rebound. The…
TIF - Tiffany & Co. – Options on the world’s second-largest luxury jewelry retailer are mixed today, with much of the action centering in the front month calls and puts. The day’s volume, currently at 21,500 contracts as of 11:35 a.m. in New York, is more than twice the stock’s 90-day average volume of 9,971 options. The pick-up in options activity arrives on the heels of the Company’s fourth-quarter results and full-year earnings guidance ahead of the opening bell. The jeweler’s full-year earnings forecast at $4.05 per share beat analyst expectations, sending the price of the underlying up as much as 8.0% on Tuesday morning to $74.20. The sharp rally in Tiffany’s shares is a move one strategist had been positioning for last week. It appears the investor initiated a bull call spread back on Monday March 12, buying the April $70/$75 spread roughly 3,500 times at an average net premium of $1.54 per contract. The rise in open interest at both strikes in the days that followed may mean the trader added to the position last week. The bullish play on the jeweler is working out so far, with the shares well above an estimated breakeven share price of $71.54 on the spread. The trader walks away with maximum available profits as long as Tiffany’s shares move up another 1.1% over today’s high of $74.20 to top $75.00 at expiration next month.
KORS - Michael Kors Holdings, Ltd. – The number of open options positions on Michael Kors Holdings, Ltd., as measured by open interest of 30,337 total contracts, is roughly 65.0% comprised of call positions. The preponderance of open KORS calls versus puts was heightened yesterday by one large transaction involving roughly 10,200 far out-of-the-money front month calls. The Company…
KORS - Michael Kors Holdings Ltd. – A number of options strategists appear to have benefitted handsomely from bullish positions held in the House of Kors today, with shares in the luxury retailer ballooning on better-than-expected third-quarter earnings. Shares in Michael Kors Holdings Ltd. have more than doubled since the December IPO, trading 22.7% higher on the day at $41.25 as of 11:40 a.m. Options on Kors are abuzz with after-earnings activity, with around 3.6 call options changing hands for each single put option in play. Some traders that placed bullish bets on the retailer in the weeks leading up to earnings in some cases saw the value of their positions sky-rocket. One buyer of a 1,500-lot Feb. $34/$37 call spread at an average net premium of $1.05 per contract on Feb. 9th may reel in maximum possible profits on the position at expiration, given shares in KORS are now trading well above the upper $37 strike. Call open interest in the front month is heaviest at the $33 strike where more than 5,480 positions were opened before today. It looks like most of the volume was generated in a single block of 4,831 calls that traded at $1.15 each on Feb 7th. The calls traded to the middle of the market one week ago with the bid/ask showing $1.05/$1.30. Today, these deep in-the-money calls trade at bid/ask of $8.20/$8.40 as of 12:15 p.m. The impact of better-than-expected earnings on the shares certainly makes for a happy Valentine’s Day for the trader in the event he or she purchased the contracts last week or a rather Grey day were the calls originally sold. Finally, investors positioning for shares in Kors to extend gains snapped up in-the-money calls at the $40 strike in February and March, as well as picked up around 255 calls out at the May $44 strike at an average premium of $1.56 each.…
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Note from dshort: In response to a special request and in light of the strong market performance in the S&P 500 and meteoric rise in the Nikkei 225, I've updated my Mega-Bear weekly chart series through Friday's close.
It's time again for an update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.
The chart below is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.
Despite the eagerness of Abenomics and the new BOJ head Kuroda to have their cake and eat it too, in this case manifesting in soaring stock prices, plunging Yen, rising GDP and exports, and most importantly, flat or declining bond yields, so far they have succeeded in carrying out three of the four (assuming Japanese economic data reporting is more accurate than that of its neighbor China), as it is physically impossible for any central planner to completely overrule the laws of math, economics and physics indefinitely. In this vein, we have described on ...
The Local, a website with German news in English reports Economists warn against German euro exit. “Even a believable rumour that Germany would exit the euro would result in a massive capital flight from the countries of southern Europe to Germany.”
The southern European banking system would then collapse, bringing down entire economies with them, Schmieding said.
The consequences for Germany would be severe. The crisis countries could no longer pay back their debt and Germany’s important export markets would drop off. On top of that German taxpayers would be burdened with immense costs, he said.
On the other hand if you add up the expected growth advantages of euro membership between 2013 and 2025 there would b...
Global X, the New York-based ETF sponsor known for its unique lineup of commodities and emerging markets funds, announced six of its ETFs will be reverse split, including three gold mining-related funds.
The $29.4 million Global X Gold Explorers ETF (NYSE: GLDX) will undergo a 1-for-4 reverse split while the $2.78 million Global X Junior Miners ETF (NYSE: JUNR) will see a 1-for-3 reverse split. The Global X Pure Gold Miners ETF (NYSE: ...
It seems that every Tuesday in 2013 since January 8 has been positive on the Dow. And this past Tuesday was no exception. Now that sounds like a trend to put money on -- buy the SPDR Dow Jones Industrial Average ETF (DIA) at the close each Monday and close out the position late on Tuesday.
The Dow and S&P 500 both hit new all-time highs once again on Wednesday, while the Nasdaq hit its highest level since November 2000. The “risk on” allocation of new investment capital into cyclicals continues, although Wednesday saw leadership from defensive sectors Consumer Staples, Utilities, and Telecom, along with Financials. Nevertheless, ConvergEx reports that the average correlation of the ten S&P business sectors to the overall index averaged 82% last month. While that is below the 86% averag...
BMY - Bristol-Myers Squibb Co. – Shares in drug maker, Bristol-Myers Squibb Co., are ripping higher today, up 6.5% at $44.94, the highest level in more than a decade, ahead of the release of the American Society of Clinical Oncology (ASCO) 2013 Annual Meeting abstracts tonight. The ASCO Annual Meeting begins on May 31st in Chicago. Options on BMY are far more active than usual today, with overall volume topping 64,000 contracts by 12:25 p.m. ET, versus average daily volume of around 11,400 c...
We are starting to see some very extreme readings on our monthly and weekly index charts since there has been no correction this year. I posted below first the monthly chart of the S&P 500 going back 15 years showing bollinger bands – rarely do we get above the upper one, and never have we been this far above. Then below that I posted (with 4 charts of 4 years each) the weekly data and you can see we are at a rare time we are above the weekly bollinger band as well. This non stop rally is getting very historical.
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Stock market posts another record setting week, but the big news came after Friday’s close.
Courtesy of NASA
The stock market put on another record setting show with the Dow Jones Industrial Average (NYSEARCA:DIA) closing at a record high 15,118 and the S&P 500 (NYSEARCA:SPY) closing at 1633.70, another all time closing high.
For the week, the Dow Jones Industrial Average (NYSEARCA:DIA) gained 1%, the S&P 500 (NYSEARCA:SPY) climbed 1.2%, the Nasdaq Composite (NYSEARCA:...
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Well, well, well....it is good to know that there are others in the scientific arena who believed that YMI Bioscience's data (cough - Gilead) is a better drug than Incyte's Jakafi. Now, the definitive data are still unknown, but there was enough evidence from a Phase 2 trial to take a small risk for a huge reward. So, let's forget about Apple (AAPL), and do nothing but biotechs from now until Congress passes universal health care coverage for prescriptions....and drive the prices down so that research and development is no longer feasible to conduct in the US. Even Seattle Genetics (SGEN) has been on a tear as of late...
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(
