Call Volume Pops At Palomar Medical Technologies As Shares Extend Gains
by Option Review - March 4th, 2013 1:26 pm
Today’s tickers: PMTI, LNKD & STP
PMTI - Palomar Medical Technologies, Inc. – Options on Palomar Medical Technologies are trading more actively than usual on Monday, with volume topping 1,200 lots in the early going versus average daily volume of around 30 contracts and compared to total open interest of 372 contracts. Traders appear to be positioning for shares in the maker of proprietary laser systems for hair removal to rally in the near term, with shares in the name up better than 3.2% this morning at a fresh 52-week high of $11.30. Palomar shares have increased 60% since mid-November 2012. The April $12.5 strike calls attracted the most volume during the first half of the trading session, with upwards of 960 lots in play versus open interest of two contracts. Time and sales data suggests most of the $12.5 strike calls were purchased for an average premium of $0.85 each. Call buyers stand ready to profit at expiration next month should shares in Palomar tack on another 18% to top the average breakeven price of $13.35.
LNKD - LinkedIn Corp. – Shares in LinkedIn are bucking the trend today, increasing as much as 2.2% to hit a fresh record high of $174.25 on Monday morning amid a tepid start to the trading week for U.S. stocks. Traders positioning for shares in the online professional network operator to continue to hit new highs during the next four sessions snapped up weekly calls on the stock today. Buyers stepped in the purchase the Mar. 08 ’13 $175 and $180 strike calls in the early going this morning, paying average premiums of $2.20 and $0.96 apiece for the contracts. Traders long the upside calls may profit at expiration this week in the event that LNKD shares rally another 1.7% and 3.9% to surpass average breakeven prices of $177.20 and $180.96, respectively. Meanwhile, sellers of the Mar. 08 ’13 $175 strike put options are also positioned to benefit from a short-term bullish view on LNKD should shares extend gains this week.…
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LinkedIn Corp. Calls In Play As Shares Rise To Record Highs
by Option Review - February 27th, 2013 2:00 pm
Today’s tickers: LNKD, DLTR & PZZA
LNKD - LinkedIn Corp. – Shares in the online professional networking company are soaring today, up as much as 7.0% to touch a record-high of $168.82 during the first half of the trading session on positive analyst comments. The price target on LinkedIn was raised to $200.00 from $160.00 at Evercore this morning, and the stock was rated new ‘Buy’ with a 12-month target price of $195.00 at Wunderlich Securities. LNKD shares, up nearly 40% in the past two weeks alone, have rallied more than 95% since this time last year. Options traders positioning for shares in the name to move higher this week snapped up in- and out-of-the-money weekly calls on the stock today. Traders looked to the Mar. 01 ’13 $160, $165 and $170 strikes, driving volume at each strike well above open interest levels. The $165 and $170 strike calls are the most active by volume, with upwards of 2,300 contracts in play at each as of 11:25 a.m. ET. Much of the volume appears to have been purchased at average premiums of $1.98 and $1.10 apiece, respectively. Meanwhile, nearly 1,000 call options have changed hands at the higher Mar. 01 ’13 $175 strike versus open interest of 250 contracts. Trading in the $175 calls is mixed, with roughly equal numbers of contracts purchased and sold. Buyers of around 350 of the $175 strike calls paid an average premium of $0.34 apiece in the early going, and may profit at expiration this week should shares in LNKD rally another 4.0% over today’s record high of $168.82 to surpass the average breakeven point at $175.34.
DLTR - Dollar Tree, Inc. – Upside calls purchased on Tuesday ahead of Dollar Tree’s fourth-quarter earnings report this morning landed one or more traders substantial overnight paper profits, with shares in Dollar Tree spiking nearly 14% to an intraday high of $46.71 on Wednesday morning. The largest increase in open interest on Dollar Tree overnight was in the Mar. $42.5 strike calls; a review…
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Bearish Options Active On Molycorp As Shares Nosedive
by Option Review - January 10th, 2013 3:05 pm
Today’s tickers: MCP, IACI & LNKD
MCP - Molycorp, Inc. – Shares in rare earth metals mining company, Molycorp, Inc., are reeling Thursday morning after the Greenwood Village, Colorado-based company missed its 2012 production target and lowered its 2013 revenue and cash estimates. The stock is currently down 24% on the day to stand at $8.20 as of 11:00 a.m. ET. Analysts at JPMorgan cut their price target on the stock to $5.00 from $8.00 today. Options traders positioning for shares to weaken further by the end of this week initiated bearish plays in weekly put contracts. Put volume is on the rise at the Jan 11 ’13 $9.0, $8.5 and $8.0 striking prices this morning. Traders appear to have purchased around 1,100 in-the-money puts at the $9.0 strike, and another 2,350 lots at the $8.5 strike in the early going. The $8.0 strike puts have traded upwards of 2,200 times thus far today versus zero previously opened positions, with the bulk of the contracts purchased for an average premium of $0.13 apiece. Traders long the Jan. 11 ’13 $8.0 strike puts stand ready to profit at expiration this week should Molycorp’s shares decline another 4% from the current price of $8.20 to breach the average breakeven point at $7.87. MCP shares, down more than 70% since January 2012, last traded below $7.87 on November 23rd.
IACI - InterActiveCorp – Options activity on media and Internet company, InterActiveCorp, this morning indicates one trader is preparing for shares in the name to potentially decline in the near term, perhaps following the company’s fourth-quarter earnings report in February. Shares in the operator of online dating websites, match.com and okcupid, are down more than 3% today at $43.99 as of 11:15 a.m. in New York. The single-largest transaction in IACI options this morning was the purchase of 1,500-lot Feb. $40/$45 put spread for a net premium of $1.55 each. The bearish spread makes money if shares in InterActiveCorp slip 1.2% from the current level to trade below the breakeven price of $43.45. Maximum potential profits of $3.45 are available…
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LinkedIn Weekly Calls Active As Shares Rally To Highest In Three Months
by Option Review - September 5th, 2012 2:36 pm
Today’s tickers: LNKD, MW & GFI
LNKD - LinkedIn Corp. – Shares in the professional social-networking site operator jumped 6% to a three-month high of $113.89 in the first half of the trading session after the Internet stock was raised to 'buy' from 'hold' with a share price target of $142.00 at Jefferies. Traders snapping up weekly calls on the stock this morning appear to be climbing aboard the bullish-bandwagon, positioning for additional near-term gains in the price of the underlying shares in the back half of this week. Volume in the weekly contracts is heaviest at the Sep. 07 '12 $115 strike where upwards of 3,100 calls changed hands against open interest of 543 positions. It looks like most of the $115 calls were purchased for an average premium of $0.47 apiece, thus preparing buyers to profit at expiration in the event LNKD shares exceed the average breakeven price of $115.47. Upside calls are also in play at the Sep. 07 '12 $120 strike, with roughly 460 of the contracts purchased this morning for an average premium of $0.15 each. Some bullish positions initiated yesterday and Friday are already seeing substantial paper profits given the big upside move in the shares today. Upside call buyers who picked up around 700 of the Sep. 07 '12 $110 strike call during the prior two trading sessions paid between $0.60 and $0.75 apiece for most of the contracts. Premium on the $110 weekly calls has increased five-fold since then from roughly $0.75 each on Tuesday to $4.10 per contract as of 12:15 p.m. ET on Wednesday.
MW - The Men’s Wearhouse, Inc. – Options on men’s clothing retailer, Men’s Wearhouse, are active ahead of the company’s second-quarter earnings report after the close this afternoon. Shares in the name are up 0.90% at $31.80 as of 12:35 p.m. ET, and at least one strategist is positioning for further gains in the share price in the near term. The…
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Friday Fake Out – The Bear Trap is Sprung!
by phil - June 1st, 2012 8:26 am
Oh you people are such suckers!
You panic out of positions at rock bottom prices and you'll sit there like a deer in the headlights when we bounce back until we're already too high again and then you'll chase the top – only becoming fully invested after we've already exited. Don't blame me – I try to warn you, but no one listens to me.
This morning the markets are in full panic more and that's fine with us as not only are we still "Cashy and Cautious" but what did we tell you Wednesday morning? "TZA July $19/25 bull call spread at $1.50, selling $18 puts for $1.05 for net .45" along with EDZ at $17.23 and SQQQ at $51.80. SQQQ is at $53.79 (up 3.8%) and EDZ is $17.90 (up 3.9% and the TZA hedge is already at net .80, which is up 77% in just two days (so far) – now that's a hedge! When you have your hedges in place, THEN you can bottom fish with impunity and boy is the fishing good out there!
Today we get our Non-Farm Payroll numbers and there's a rumor out there that it's a big miss at 120,000 or lower. CNBC has been pretty much reporting it as a fact all morning and Europe is freaking out for that and many other reasons so I had occasion to look back at last month's NFP report, where we predicted it would be a miss with the the title: "The Blow Jobs Deal to the Market Could be Huge." That was 10% ago on our indexes are back to testing last week's lows, where we began to get bullish with our Twice in a Lifetime List of stocks that are back at their 2009 panic lows which we still like enough to sell puts in (giving us an additional 15-20% discount on initial entry).
That post capped off a week of bearish picks as we followed through with our plan to cash out into the April rally – it's those bearish profits we're now GAMBLING with as we bottom fish but, as noted above – we're hedging our bullish bets because there's no limit to how badly investors can freak out in the stock market – CASH remains KING!
A quick review of the week leading up to the last NFP report is a nice view of…
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Bears Connect With LinkedIn Puts As Shares Decline
by Option Review - May 8th, 2012 2:09 pm
Today’s tickers: LNKD, XRT & FOSL
LNKD - LinkedIn Corp. – Activity in far out-of-the-money put options on the social networking site for professionals suggests some traders fear the price of the underlying could drop substantially from current levels. Shares in LNKD closed last week at $117.31, up nearly 80.0% year-to-date at the highest closing price since the IPO, following the release of better-than-expect first-quarter earnings. However, near-term bearish positions initiated this morning look for declines in the near term, while longer-term put purchases paint a far gloomier picture for the shares during the next few months. LinkedIn’s shares are off their lows of the session, but remain firmly in the red, down 4.7% at $106.24 as of 12:25 p.m. in New York. Weekly put buyers snapped up puts at the May $100 and $95 strikes, shelling out an average premium of $1.24 and $0.75, respectively, for more than 500 contracts at each strike. Traders may profit at the end of the week if shares in LinkedIn continue to sink. Meanwhile, the purchase of more than 1,650 puts at the July $70 strike for an average premium of $1.22 apiece look for shares to plunge more than 35.0% this summer. Traders long the $70 strike puts make money if shares in LNKD settle below the effective breakeven price of $68.78 at July expiration.
XRT - SPDR S&P Retail ETF – Retail stocks may continue to sell off, by the looks of massive stakes taken in XRT put options this morning. Shares in the equal-weighted retail ETF are down 1.5% at $59.45 this afternoon as stocks across the board sink. The two largest trades in XRT options today are in the May $56 put, with a total of 55,000 contracts purchased in two blocks at a premium of $0.35…
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Vega Trade On DJX Sees Choppy Markets On The Horizon
by Option Review - May 3rd, 2012 3:18 pm
Today’s tickers: DJX, LNKD & LULU
DJX - 1/100 of the Dow Jones Industrial Average – A massive vega trade initiated in the DJX today sent off ripples across major indices and single-stock names as market makers scrambled to hedge their sales of volatility that occurred due to the trade. The purchase of 30,000 Dec. 2014 $135 calls on the DJX, delta-hedged by a June 2014 $132 collar, is a pure volatility play that makes money if markets grow increasingly choppy going forward. Signs Europe’s crises may be coming to the fore once again could play a role in rising market volatility, which U.S. equities have largely been able to cast aside during the first quarter given positive domestic economic data and strong corporate earnings. The VIX has remained below 25 all year, passing much of its time just above or below the 17-level. For an investor anticipating rough seas up ahead, multi-year lows for the fear index provide an opportunity to lock in vega while it’s relatively cheap rather than wait for Nostradamus’ Armageddon, or more likely, continued turmoil across the pond, to blow volatility through the roof.
LNKD - LinkedIn Corp. – Shares in the social networking site for professionals are up 0.25% this afternoon to stand at $106.65 ahead of the Company’s first-quarter earnings report after the final bell today. Trading traffic in LinkedIn weekly calls suggests some traders are positioning for shares in the name to extend gains following the report. Notable bullish interest is building in the May 04 ’12 $115 strike options where more than 2,000 calls changed hands against open interest of 878 contracts by 12:15 pm in New York. It looks like most of the calls were purchased for an average premium of $3.07 apiece, thus positioning traders to profit…
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Pre-Earnings Report Posturing On The Rise In Lululemon Options
by Option Review - March 21st, 2012 1:27 pm
Today’s tickers: LULU, ARIA & LNKD
LULU - Lululemon Athletic, Inc. – Lululemon’s shares are in rally-mode today, ahead of the athletic apparel retailer’s fourth-quarter earnings report Thursday morning. The stock trades higher by 1.45% to stand at $73.94 in early-afternoon trade, and it looks like some traders are using LULU options to taking pre-earnings report positions that benefit from further upside moves in the price of the underlying. One strategist appears to have initiated a bullish butterfly spread, buying around 3,000 calls at the April $75 and $85 strikes, and selling 6,000 calls at the April $80 strike, all for a net premium outlay of $0.92 per contract. The parameters of the spread indicate potential losses, and potential gains, are limited; maximum possible losses are capped at $0.92 per contract. The trader may profit at expiration in the event that Lululemon’s shares rally 2.7% to surpass the effective breakeven price of $75.92, with maximum possible profits of $4.08 per contract available given an 8.2% move higher in the shares to $80.00. It looks like the butterfly spread is not the only bullish strategy calling for LULU’s shares to head higher. Last Friday, a large block of 12,551 April $80 strike calls were purchased for a premium of $1.60 each. While both transactions look for Lululemon’s shares to rally to fresh record highs, one earns maximum possible gains if shares settle at $80.00, while the other looks for shares to rally above $81.60 by expiration next month. More than 33,500 option contracts have changed hands on LULU just before 12:30 p.m. in New York.
ARIA - ARIAD Pharmaceuticals, Inc. – Options on biotechnology company, ARIAD Pharmaceuticals, are more active than usual today following Tuesday’s reported 13-to-1 ruling by the FDA’s Oncologic Drugs Advisory Committee against the use ridaforolimus. The…
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Friday Finale – This is the End – But for Who?
by phil - February 17th, 2012 8:19 am
A day late and a point short on the S&P.
Our senior index finished the day at 1,358.04, just 0.96 under our 10% line at 1,359. Oddly enough, it never actually crossed the line that we had predicted would be the top of this run in April of 2009. It's a simple 2% overshoot of the 100% run from the S&P bottom at 666.
If the S&P can get over the line and hold it – we will be THRILLED to finally redraw our Big Chart but, if not, then this is just the blow-off top of the range, reeling in the suckers ahead of the big reversal that no one could have possibly seen coming (except this guy but he's like 100 and just got divorced, so he's bound to be in a bad mood).
Is there anyone who was born SINCE radio who is willing to still be bearish? As you can see from David Fry's chart, since December 19th, other than a few red days out of over 40 – it's been tough to be a bear. This is what it was like in 1999, when the experienced market players would be well-hedged and missing the rally while some kid who works for him quits because he bet his student loan money on Yahoo and now drives a Porsche.
Sure 9 months later the Porsche was repossessed and the kid was flipping burgers but WE WANT TO BE THAT KID – IT'S FUN TO BE THAT KID – until it isn't again. The funny thing is, we only gave those dot com companies Millions when they IPO'd – now we give out Billions because, of course, this time is different, it's a new paradigm, this changes everything, you have to understand the new metrics, sock puppets rule….
McDonald's was founded in 1940 by two brothers actually named McDonald. Ray Krok bought the chain from them and created the World's greatest franchise which now has over 26,000 franchise operations and over 6,000 company stores employing about 1.7M people worldwide selling $24Bn worth of food a year with a $5Bn net profit. Facebook has 3,200 people but they generate $1.2M in revenues per employee ($3.8Bn) and drops $1Bn to the bottom line. Facebook's assets are mainly IP and those are about as valuable as MySpace's assets now…
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LinkedIn: Initiating Coverage with a SELL and $45 price target – Capstone
by ilene - July 7th, 2011 4:08 pm
Courtesy of Notable Calls
LinkedIn (NASDAQ:LNKD): Initiating Coverage with a SELL and $45 price target – Capstone
Capstone Investments is making the call none of the other Wall Street firms want to make:
LinkedIn (NASDAQ:LNKD): Initiating Coverage with a ‘SELL’ and $45 price target – Price isn’t the Only Risk
- The 18 pg note accuses the online recruiting firm of creative accounting, lower-than-advertised user base, high fixed cost business model and poor corporate governance.
All this they say, comes with a bubbly valuation not seen since 1990′s. According to Capstone, their Street low $45 price target could prove to be too optimistic as the company fails to execute its ambitious business plan & insiders start dumping the shares. IPO lock-up expires in November 2011.
‘… LinkedIn is an online professional identity and recruitment tool. Sprinkle on the "social media" moniker and in the Internet Bubble 2.0 you can price an IPO at $45per share, or 34% higher than the price talk midpoint, and the watch the stock rise to $94.54 – although it has been as high as $122.70 and as low as $60.14 over the sex weeks since LinkedIn’s stock offering – to give this break-even business a $93.4 billion market cap. … ‘
Paul Meeks, CFA at Capstone
The PDF file is copy-locked so I can only show you the Summary page of the note:
- Merrill, JPM, Morgan Stanley & UBS were the underwriters. They need to keep their clients (both sides) happy.
- Facebook. The biggest IPO in recent memory is expected some time in 2012. Everyone wants a piece of the action and they are not going to get it by issuing Neutrals (or god forbid Sells) on other Social Media names.
That leaves the door open for Capstone to come in with a seriously scary story and a price target that should send people selling at least in the n-t.
I expect LNDK to trade down today, possibly to the tune of 5-10%, putting $89-85 levels in play.
posted by notablecalls # 7:02 AM
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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
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