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Posts Tagged ‘MDT’

Bullish Options Strategy Working After Mattress Merger Lifts TPX

www.interactivebrokers.com

 

Today’s tickers: TPX, YHOO & MDT

TPX - Tempur-Pedic International, Inc. – Shares in memory-foam mattress maker, Tempur-Pedic International, Inc., jumped 23% to $32.99 on Thursday after the company said it will pay $2.20 a share or $229 million for private equity-owned Sealy Corp. in a deal that combines the two largest publicly-traded mattress companies. TPX options are more active than usual today on the news, with volume currently approaching 6,000 contracts by 11:45 a.m. ET versus the stock’s average daily options volume of around 1,500 contracts. One options trader who initiated a three-legged bullish play on Tempur-Pedic on Tuesday saw the value of the position rise substantially with the pop in the price of the underlying today. The strategist appears to have sold 500 puts at the Nov. $24 strike in order to partially offset the cost of buying a 500-lot Nov. $30/$35 call spread. The net cost of establishing the bullish stance on TPX on Tuesday amounted to $0.45 per contract, leaving the trader with an upside breakeven price of $30.45 and the opportunity to rake in as much as $4.55 per contract in profits provided shares top $35.00 by November expiration. The sharp move in TPX shares Thursday finds premium required to establish the same three-way spread has since increased 360% to $2.10 per contract based on bid/ask prices available as of 12:05 p.m. ET. Trading traffic in TPX options today suggests the strategist is still holding onto the position. Finally, fresh positioning in front-month call options this morning indicates other strategists are taking a bullish stance on the shares. Upwards of 400 calls changed hands at the Oct. $32 strike versus open interest of 172 contracts. It looks like most of the calls were purchased for an average premium of $2.09 apiece this morning, providing buyers an upside breakeven price of $34.09.

YHOO - Yahoo!, Inc.– A large bull call spread initiated on Internet media company, Yahoo!, Inc., this morning suggests…
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Jobless Thursday – America’s Infrastructure Crisis

What a disaster!

Not only are our students failing to keep up with the rest of the World but America is close to getting a failing grade in Infrastructure.  That’s right, what was once the World’s mightiest and proudest economy, this once great nation of builders has been given an overall grade of D in the American Society of Civil Engineers report on our Infrastructure.

The 2009 Grades include: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).  Awful?  Shameful?  How about DANGEROUS?  Deadly even…

For one thing, The number of high hazard dams—dams that, should they fail, pose a significant risk to human life—has increased by more than 3,000 just since 2007, when there were "just" 1,000 dams at risk and 3,000 to pro actively maintain but the administration refused to fund the project, now the costs have tripled as the situation deteriorates but that’s nothing compared to what happens if just a few of them break completely.  1,819 dams are now in the "high hazard" category and, with the current budget, for every one damn that is reparied, two more become an emergency.  

In urban areas, roadway congestion tops 40 percent.  According to the report, decades of underfunding and inattention have jeopardized the ability of our nation’s infrastructure to support our economy and facilitate our way of life.  At risk of catastrophic failure besides the dams (including levees) are things like our drinking water, sewage systems, bridges, waterways, rail lines, airports, roadways (especially elevated ones) and, of course, our entire electrical grid.  Additionally, 7 Billion gallons of clean drinking water is lost every day through leaking pipes – that’s 23 gallons per citizen per day WASTED for want of $11Bn in repairs – don’t bother worrying about it, the last Administration wouldn’t fund it in 2001 or 2006 so why bother now – 10 Trillion gallons later? 

The ASCE calculates a 5-year $2.2Tn investment is needed to address the situation, that’s $500Bn (25%) more than it was 5-years ago, when they released their last report and nothing was done by the previous administration.  So, rather than having invested in America, putting people to work and improving EVERYONE’s way of life, we spent over $1Tn fighting a war, another $600Bn a year on our regular military operations and gave over $1Tn worth of taxe breaks…
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2010 Outlook – A Tale of Two Economies

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only." – Charles Dickens, 1859

Dickens famous novel (which was originally written as a weekly series in 31 installments) depicts life in the time of the French revolution but was also a parable, meant to warn the British aristocracy that they should not ingore the parallels to the social inequities that existed at the time in England.  Dickens warned the nobles that the seeds of revolution were planted through unjust acts and surely there would be a time of reaping yet to come

It is said that the French Revolution was sparked by outrage over a statement by the Queen Mary Antoinette who, when told that the peasants had no bread to eat, supposedly replied (she never actually said this) "Qu’ils mangent de la brioche" or "Then let them eat cake."  It’s hard for us to imagine the impact of this statement in modern times but "peasants" were 90% of the population at the time and bread was 90% of what they ate, consuming 50% of the average family’s income (people weren’t silly enough to pay for housing back then – they just found a bit of land, bought some wood and nails and built their own homes).  Brioche was a luxury combination of bread enriched with flour and butter so the statement "Qu’ils mangent de la brioche" implies both lack of caring and cluelessness on the part of the Queen. 

The United States had what passes for a revolution between 2006 and 2008 as we threw out the Republicans and went with a Democrat-controlled government.  While the Bush administration, the Republican Congress and Fox News may have been as clueless as a French Queen to the plight of the people – the fact of the matter is that the base pay
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Merry Christmas Eve

First of all, what are you doing here?

Why it’s Christmas Eve, Mr. Scrooge – Most global markets are having a half day so, if you are waiting for a Santa Clause rally on a half-day’s trading, you are very likely to be disappointed.

Remember Marley, who cried: "Business!  Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"

Marley was a man who worked and worked until the day he died and regretted it every day after.  If you don’t believe in an afterlife and you don’t believe in leaving behind the World a better place than you found it, at least find some time for yourself so people don’t call you "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner!" 

Those covetous old sinners in Congress passed the Health Care Bill in the Senate today with a 60-39 vote (Republican Jim Bunning did not vote against the bill but was too chicken to actually vote for it) so we can pretty much count on it moving through the House and on to Obama’s desk in the very near future.  While it’s a total botch-job of a bill, at least America has taken the first civilized strep to recognizing that health care is a right and not a privilege – Tiny Tim would be very proud!

We were told by Fox that Health Care reform would destroy the universe but the market has taken the December passage of the bill very much in stride so maybe we should have just gone for it with Universal Health Care after all…  Oh well, maybe next year!  Meanwhile, we’ll be looking for good investing opportunities once we get a handle on the final bill but I still favor the device space (IHI, MDT, BSX, JNJ, GE, ISRG) as well as big pharma (MRK, PFE), who will be able to serve tens of millions of new customers.  Hospitals (UHS, THC) should also start filling up and we always like our CELG as well as AMGN, who should also benefit from adding a population the size of England to the health care rolls right here in the USA.  I’m waiting for the final bill but home health care providers (AMED,…
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More Reversal Activity for Massey Energy

www.interactivebrokers.com

Today’s tickers: MEE, INTC, IYR, TYC, XLF, YHOO, COF, SMH & MDT

MEE – The coal producer edged onto our ‘most active by options volume’ market scanner this afternoon after one investor was seen initiating a bullish reversal in the July contract. Although we could not see any obvious driver behind today’s play, the trader is looking for shares of MEE to move higher over the next month. Shares are currently up more than 1% to $19.97. The transaction involved the sale of 9,000 puts at the just-in-the-money July 20 strike price for an average premium of 1.55 apiece spread against the purchase of 9,000 calls at the July 20 strike for 2.05 each. The net cost of the trade amounts to 50 cents per contract and yields a breakeven point at $20.50. Shares must rise a paltry 53 cents from the current market price of the underlying in order for this optimistic options player to begin to amass profits. – Massey Energy Corp.

INTC– Shares of the semiconductor chip maker have enjoyed a 1% rally to $16.00 amid gains experienced by many tech-stocks today. We observed bullish investors positioning themselves for upward price movement in INTC through expiration in October. More than 15,000 calls were bought at the October 18 strike price for an average premium of 60 cents apiece. With a breakeven point located at $18.60, investors will begin to amass profits on today’s trade if shares can climb 16% by expiration day. – Intel Corporation

IYR – Shares of the real estate fund are higher by less than 0.5% to stand at $32.43. Options activity of note occurred in the September contract where it looks as though an uber-bullish call spread has been established. The purchase of 2,300 calls at the September 41 strike price for an average premium of 40 cents apiece was spread against the sale of 2,300 calls at the higher September 47 strike for about a nickel each. The net cost of the play amounts to 35 cents and yields maximum potential profits of 5.65 if shares can climb up to $47.00 by expiration. Before the party responsible for this transaction can begin to dream of profits, the price of the underlying must rise approximately 28% to the breakeven point at $41.35. – iShares Dow Jones U.S. Real Estate Index ETF

TYC – The world’s largest provider of security systems (through
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Zero Hedge

History Made: For The First Time Ever, US Consumers Spent More On Food In Restaurants Than In Grocery Stores

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Over the weekend, we mocked the WSJ for glorifying the US "wage recovery" by focusing on the "scarcity" of waiter and bartender jobs ("there is fierce competition" for restaurant workers the WSJ said), a concept well-explored on these pages: we have shown repeatedly that soaring number of waiters and bartenders have been the "backbone", so to say, of the US job recovery in recent years (alongside energy workers but th...



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Phil's Favorites

60 Minute Investigation shows Lumber Liquidators Laminate Flooring Contains Toxic Amounts of Formaldehyde; Democrats Want Federal Probe

Courtesy of Mish.

People in California complain their flooring is making them sick. The complaints have one source in common, Lumber Liquidators laminate flooring from China with toxic levels of Formaldehyde, up to 20 times the maximum amount in one test. US manufactured flooring does not have the same defects.

Health and Safety Violations

Please consider Lumber Liquidators Linked to Health and Safety Violations.
The following is a script from "Lumber Liquidators" which aired on March 1, 2015. Anderson Cooper is the correspondent. Katherine Davis and Sam Hornblower, producers.

Lumber Liquidators is the largest and fastest-growing retailer of hardwood flooring in North America, with over 360 stores in 46 states and reve...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Chart School

Median Household Income Was Little Changed in January

Courtesy of Doug Short.

Summary: The Sentier Research monthly median household income data series is now available for January. The nominal median household income was down $49 month-over-month but up $1,672 year-over-year. That's a -0.1% MoM loss but a 3.2% YoY gain. Adjusted for inflation, the numbers were up $321 MoM and $1773 YoY. The real numbers equate to a 0.6% monthly increase and a 3.4% yearly increase, thanks to -0.68% MoM drop in the Consumer Price Index.

In real dollar terms, the median annual income is 4.6% lower ($2,600) than its interim high in January 2008 but well off its low in August 2011.

Background on Sentier Research

The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for ...



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Insider Scoop

The Bob Evans Farms Miss 'Just Doesn't Make Sense,' Says Oppenheimer

Courtesy of Benzinga.

Related BOBE Benzinga's Top #PreMarket Losers Keep an Eye on These 10 Stocks for March 4, 2015 BOB EVANS FARMS (Investor's Business Daily)

In a report published Tuesday evening, Oppenheimer analyst Brian Bittner commented that he is "perplexed" following Bob Evans Farms Inc's (NASDAQ: BOBE) third quarter results.

Acco...



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Sabrient

Sector Detector: Stocks break out again but may be running on fumes

Courtesy of Sabrient Systems and Gradient Analytics

Despite low trading volume, a strong dollar, mixed economic and earnings reports, paralyzing weather conditions throughout much of the U.S., and ominous global news events, stocks continue to march ever higher. The world remains on edge about potential Black Swan events from the likes of Russia, Greece, or ISIS (or lone wolf extremists). Moreover, the economic recovery of the U.S. may be feeling the pull of the proverbial ball-and-chain from the rest of the world’s economies. Nevertheless, awash in investable cash, global investors see few choices better than U.S. equities.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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OpTrader

Swing trading portfolio - week of March 2nd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

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. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Market Shadows

Kimble Charts: Coal

Kimble Charts: Coal

By Ilene 

Chris Kimble's chart for KOL shows a recently beaten down ETF struggling to pull itself up from the ashes. As the chart shows, KOL has recently drifted down to levels not seen since the financial crisis of 2008-9.

Bouncing or recovering with energy in general, coal prices appear to have stabilized in the short-term. Reflecting coal prices, KOL has traded between $13.45 and $19.75 during the past year. Bouncing from lows, KOL traded around 2% higher yesterday from $14.26 to $14.48 on high volume. It traded another 3.6% higher in after hours to $15, possibly related to ...



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Digital Currencies

MyCoin Exchange Disappears with Up To $387 Million, Reports Claim

Follow up from yesterday's Just the latest Bitcoin scam.

Hong Kong's MyCoin Disappears With Up To $387 Million, Reports Claim By  

Reports are emerging from Hong Kong that local bitcoin exchange MyCoin has shut its doors, taking with it possibly as much as HK$3bn ($386.9m) in investor funds.

If true, the supposed losses are a staggering amount, although this estimate is based on the company's own earlier claims that it served 3,000 clients who had invested HK$1m ($129,000) each.

...



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Pharmboy

2015 - Biotech Fever

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

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...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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