SVU - SUPERVALU Inc. – The sale of a massive block of 25,000 call options on the supermarket operator this morning may mean one strategist has little appetite for a significant Supervalu rally, at least through September expiration day. No telling if the two are related, but the sale of the call options occurred roughly one hour before the company’s CFO was scheduled to present to investors at the Goldman Sachs 18th Annual Global Retailing Conference in New York City. SVU’s shares rallied at the open, increasing 2.5% to an intraday high of $7.84, but surrendered much of those gains to stand 0.65% higher on the session at $7.70 as of 12:25 pm ET. The investor responsible for the hefty transaction may or may not be long the stock. It looks like the trader sold 25,000 calls outright at the September $8.0 strike for a premium of $0.20 per contract. The premium remains in the investor’s wallet as long as Supervalu’s shares trade below $8.00 and the calls expire worthless at expiration next week. Potentially devastating losses could result for the trader if the short calls are uncovered, and the price of the underlying stock spikes higher ahead of expiration. Premium received on the sale of the calls provides limited protection in the event of an SVU rally, but the insurance policy gives way to losses if SVU’s shares exceed the effective breakeven price of $8.20 at September expiration day. If the investor is long the stock, it seems he is happy to pad his portfolio with premium today, and willing to have shares called from him at $8.00 should the calls land in-the-money next Friday.
OMX - OfficeMax Inc. – Shares in the office supplies retailer rallied 6.3% this morning to $5.59 despite third-quarter sales estimates that trail those recorded in the same period last year, CEO Ravi Saligram’s comments that OfficeMax is, “experiencing a soft Back-to-School season,” and tough macroeconomic conditions to boot. Saligram spoke today at the…
EQIX - Equinix, Inc. – In the final trading week of 2010 we reported seeing one options strategist purchase a sizable bullish call butterfly spread on Equinix. It has been nearly four months to the day since the investor paid a net premium of $3.10 per contract for the June $85/$100/$115 call ‘fly, and it looks like the trader is reeling in substantial profits today by unraveling the position. Shares in the provider of global data center services are currently up 3.8% to stand at $100.30 as of 11:20am in New York. The company reported first-quarter earnings of $0.53 a share on Wednesday, which beat average analyst expectations of $0.30 a share in net income for the quarter. The trader responsible for the bullish spread nearly hit the nail on the head. On December 29, 2010, shares in Equinox closed the session at $81.20. Since then, the stock has climbed roughly 23.5% to today’s price. While the upward move in the price of the underlying happened a bit more quickly than estimated, the trader’s predictions for the magnitude of the move were pretty much spot on. It appears the investor closed out the spread this morning, selling 15,000 calls at the now deep in-the-money June $85 strike for a hefty premium of $16.20 each, bought back the 30,000 short calls at the June $100 strike for a premium of $4.70 each, and sold 15,000 of the June $115 strike call options at a premium of $0.30 a-pop. The trader takes in net premium of $7.10 per contract by closing out the spread, and therefore realizes net profits of $4.00 per contract, or around $6 million in total, after accounting for the initial cost of buying the spread at $3.10 apiece. Had Equinix’s shares risen more slowly, hitting $100.00 at expiration in June, the investor could have realized maximum potential profits of $11.90 per contract. But, in the end the investor’s predictions for EQIX’s performance and the…
AAPL – Apple, Inc. – Bulls sank their teeth into Apple call options today in order to position for continued appreciation in the price of the underlying through August expiration. The iPhone maker’s shares increased as much as 2.10% during the trading session to secure an intraday high of $275.97 perhaps on news the firm sold 3 million iPads in the first 80 days since the product was introduced to the U.S. marketplace. Apple optimists expecting shares to surpass yesterday’s new 52-week high of $279.01 purchased 1,100 calls at the August $280 strike for a hefty premium of $14.64 apiece. Investors long the calls are positioned to profit if Apple’s shares rally 6.75% over today’s intraday high of $275.97 to trade above the average breakeven point at $294.64 by August expiration. Bulls anticipating more significant share price gains by August expiration purchased approximately 2,500 calls at the higher August $290 strike for an average premium of $9.70 each. Investors long the August $290 strike contracts make money if the iPod maker’s shares surge 8.6% to exceed the average breakeven price of $299.70 by expiration day. Finally, uber-bulls bought 2,000 calls at the higher August $300 strike for an average premium of $7.38 a-pop. Traders holding the August $300 strike calls stand ready to accumulate profits as long as Apple’s shares jump 11.4% to trade above the average breakeven point on the calls at $307.38 by expiration day in August. Nearly 200,000 option contracts changed hands on Apple, Inc. by 3:00 pm (ET), with call options trading 1.35 times to each single put option in play.
APC – Anadarko Petroleum Corp. – Shares of the independent oil and gas exploration and production company which holds a 25% stake in BP’s leaking well in the Gulf of Mexico dropped 4.35% late in the session to stand at $41.56 as of 3:15 pm (ET). Despite the decline in the price of the underlying today one optimistic option strategist positioned himself to one day bask in the light at the end of the tunnel by enacting a bullish debit call spread in the November contract. APC’s shares plunged 53.4% from a high of $74.14 on April 20 – the day the leak was triggered – down to a 52-week low of $34.54 on June 9, 2010. Since bottoming out on…
HAL – Halliburton Co. – Making sense of options activity on oil company, Halliburton Co., this afternoon is difficult due to the chaotic and seemingly pattern-less trading taking place on the stock. Investors exchanged more than 200,000 contracts on HAL by 3:00 pm (ET), which represents approximately 37% of total existing open interest on the stock of 541,062 contracts. Frenzied options trading was catalyzed by news the firm is assisting in ongoing investigations regarding the oil spill in the Gulf of Mexico as HAL reportedly provided a variety of oilfield services to Deepwater Horizon rig, which is the rig that caught fire and sank last week. Options volume and options implied volatility on Halliburton jumped while its shares slipped 6.3% to $31.26. The surge in demand for option contracts on the stock, coupled with uncertainty regarding possible repercussions stemming from HAL’s connection to the situation in the Gulf of Mexico, lifted the overall reading of options implied volatility 25.4% to 44.13% as of 3:25 pm (ET). Trading activity is heaviest in the May contract with decent volume building in both call and put options. Some bearish investors bracing for continued share price erosion purchased about 2,200 puts at the lowest available strike – the May $25 strike price – for an average premium of $0.16 apiece. Buying interest in put options was also apparent at the May $26 strike where 1,800 puts were picked up for an average premium of $0.20 each. May $29 strike puts were the most heavily trafficked as more than 16,700 contracts changed hands by 3:22 pm (ET), versus previously existing open interest of just 2,743 contracts at that strike. But, the put action was certainly not one-sided as investors took to buying and selling the contracts, with buyers gaining the right to sell the stock at $29.00, and sellers receiving an average premium of $0.81 per contract in exchange for bearing the risk of having shares of the underlying stock put to them at $29.00. Similar two-way trading traffic in calls took place at out-of-the-money strike prices as some traders threw in the towel on bullish stances expiring in May. Meanwhile, contrarian players purchased out-of-the-money calls, perhaps to prepare for a potential rebound in the price per share ahead of expiration next month.
IPG – Interpublic Group of Cos., Inc. – Advertising and…
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.
Today's release of the August Producer Price Index (PPI) for Final Demand was unchanged month-over-month seasonally adjusted. Core Final Demand was up 0.1% from last month. Investing.com correctly forecast Core PPI but was looking for a comparable 0.1% increase in the headline number.
The unadjusted year-over-year change in Final Demand is up 1.8%, up slightly from last month's YoY of 1.7%.
Here is the essence of the news release on Finished Goods:
The Producer Price Index for final demand was unchanged in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.1 percent in July and 0.4 percent in June. On an unadjusted basis, the index for final demand increased 1.8 percent for the 12 months ended in August......
As the Scotish independence vote draws near and remains too close to call, some analysts are suggesting Plan B for Scotland may be to choose to opportunistically default. This has done nothing to calm concerns of the aftermath of a "yes" vote - despite US asset managers proclaiming it irrelevant. Nowhere is that more clear than, as The Independent reports, Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the even...
If GOOGLE, the NSA, and Bill Gates all got together in a room with the task of building the most accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you… they never got around to building it, but my colleagues at Market Tamer did.
Although the stock market displayed weakness last week as I suggested it would, bulls aren’t going down easily. In fact, they’re going down swinging, absorbing most of the blows delivered by hesitant bears. Despite holding up admirably when weakness was both expected and warranted, and although I still see higher highs ahead, I am still not convinced that we have seen the ultimate lows for this pullback. A number of signs point to more weakness ahead.
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 offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-r...
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In a report published Monday, Compass Point analyst Michael Tarkan reiterated a Buy rating and $21.00 price target on Navient Corp (NASDAQ: NAVI).
In the report, Compass Point noted, “We reiterate our Buy rating on NAVI shares after analyzing updated credit data within the company's private student loan trusts, which indicate continued YOY improvement in delinquency and default rates. The data captures statistics for trusts originated from 2002 through 2014 for the three months ended August 31, 2014, providing a good leading indicator for 3Q14 credit trends. The ongoing improvement should give management flexibility to continue to lower provision expenses to drive earnings higher.”
The CBOE Vix Index is in positive territory on Friday morning as shares in the S&P 500 Index move slightly lower. Currently the VIX is up roughly 2.75% on the session at 13.16 as of 11:35 am ET. Earlier in the session big prints in October expiry call options caught our attention as one large options market participants appears to have purchased roughly 106,000 of the Oct 22.0 strike calls for a premium of around $0.45 each. The VIX has not topped 22.0 since the end of 2012, but it would not take such a dramatic move in the spot index in order to lift premium on the contracts. The far out-of-the-money calls would likely increase in value in the event that S&P500 Index stocks slip in the near term. The VIX traded up to a 52-week high of 21.48 back in February. Next week’s release of the FOMC meeting minutes f...
Despite the various opinions on Bitcoin, there is no question as to its ultimate value: its ability to bypass government restrictions, including economic embargoes and capital controls, to transmit quasi-anonymous money to anyone anywhere.
Opinions differ as to what constitutes "money."
The English word "money" derives from the Latin word "moneta," which means to "mint." Historically, "money" was minted in the form of precious metals, most notably gold and silver. Minted metal was considered "money" because it possessed luster, was scarce, and had perceive...
Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
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