Posts Tagged ‘OPEN’

Bulls Take A Seat At OpenTable

Trading in out of the money calls on OpenTable (Ticker: OPEN) this morning pushed options volume on the provider of online restaurant reservation services to more than twice the average daily level this morning, with upwards of 9,000 contracts changing hands in the early going versus an average daily reading of around 4,300 contracts.

The most traded options on OPEN are the 21Feb’14 $77.5 strike calls, with around 6,000 lots in play against open interest of roughly 1,200 contracts. It looks like traders quick enough out of the gate managed to pay as little as $0.10 apiece for approximately 1,500 of the calls. Gains in the price of the underlying, which spiked 4.0% near the open, coupled with an influx of buyers of the $77.5 calls pushed the premium on the contracts up to as high as $0.80 each at the same time that the stock price touched its intraday high of $77.85. The price of the underlying has since backed off those highs dragging down with it the prevailing premium on the contracts, which currently show a bid/ask spread of $0.05/$0.20 each. With expiration looming large and the price of the stock sitting decidedly lower than the $77.5 striking price, the morning purchase of these contracts may have generated transaction costs and little else by the looks of it. However, a review of time and sales data indicates some traders stepped in to sell the calls at an average premium of $0.27 each roughly an hour into the session. It’s difficult to say either way who is behind the selling, but perhaps buyers of the calls this morning were able to book quick profits on their positions at OpenTable this morning.

Looking out to options with more life left in them, the March expiry calls were also active during the first 30 minutes of the session. The Mar $80 strike calls traded roughly 1,000 times, with much of the volume purchased at a premium of $1.90 per contract. Traders long the calls stand ready to profit at expiration next month in the event that shares in OpenTable surge 7.0% over the current price of $76.50 to exceed the breakeven point at $81.90. Shares in the name last traded above $81.90 back on January 21st

Chart – P&L of long Mar 80 Call Strategy in IB Option Strategy Lab
Current (solid line), At expiration (dotted line)


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Bearish Options Traders Take A Seat At OpenTable

Today’s tickers: OPEN, FDO & EAT

OPEN - OpenTable, Inc. – Shares in OpenTable are moving lower this morning, down 2.9% at $65.96 as of 11:10 a.m. ET, after analysts at Citigroup initiated a ‘sell’ rating on the stock with a price target of $58.00. Options on the provider of online restaurant reservations are more active than usual, with volume nearing 1,200 contracts versus the stock’s average daily volume of around 600 contracts. Front month put options are seeing the most action, specifically at the Jul $65 strike where more than 800 contracts have changed hands so far today. It looks like most of the $65 puts were purchased for an average premium of $1.13 apiece, thus positioning buyers to profit at expiration next week in the event that OpenTable’s shares dip 3.2% from the current price of $65.96 to breach the average breakeven point on the downside at $63.87.

FDO - Family Dollar Stores, Inc. – Upside call options are changing hands on discount retailer, Family Dollar Stores, Inc., today with shares in the name up as much as 4.6% in the early going to touch a six-month high of $66.90. The company reported better than expected third-quarter comparable store sales growth and higher than expected third-quarter earnings ahead of the opening bell. The Aug $67.5 strike calls attracted the most volume during morning trading, with upwards of 3,900 contracts in play against open interest of 138 contracts. It looks like most of the $67.5 strike calls were purchased for an average premium of $1.60 apiece. Call buyers stand ready to profit at expiration next month should shares in FDO rally another 3.3% over today’s high of $66.90 to surpass the average breakeven price of $69.10. Shares in Family Dollar Stores last traded above $69.10 in December of 2012.

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Testy Tuesday – AAPL Rebalancing in May May Keep the Nasdaq from 2,800 Today

A staff member holds the new Apple iPad2 at the Apple store in London March 25, 2011. REUTERS/Luke MacGregorThe Nasdaq is finally rebalancing!  

That is good news but not so much for Apple, Inc., whose current 20.49% weighting in the index will be cut to 12.33% on May 2nd.  This explains a lot of the strange movement in the Nasdaq as apparently the cognescenti have already begun jockying their positions – trying to guess which of the 100 stocks in the Composite Index will curry some of AAPL's lost favor.  

Perhaps the the moves up in fellow 4-letter stocks like PCLN ($25Bn market cap), NFLX ($13Bn), OPEN ($2.5Bn), BIDU ($50Bn) and GMCR ($9.4Bn) don't seem quite so crazy in light of the 40% reduction in AAPL ($314Bn) – take the money out of one bucket and you HAVE to fill up the others!  

This does make me feel better as there may actually be a rational reason for NFLX having a p/e of 82 despite the fact that they have a completely indefensible service that already has competition from several on-line clones as well as big boys like AMZN, not to mention every cable and satellite company in America.  Why does WFMI, a GROCERY STORE, trade at 41 times it's projected 2011 earnings in the middle of the worst food inflation in US history?  It's not just because rich people are stupid and will overpay for anything because they hate to have people think they can't afford stuff – it's because their market cap is $11.4Bn and if you take 40% of AAPL's $300Bn and distribute it around the Nasdaq – then WFMI get's $1.2Bn of additional allocation.  

That's not exactly how it works but that's the effect.  A $1Bn Index fund who follows the Nasdaq has $205M of AAPL stock (20.49%) and, after the reweighing, they are to have $123M of AAPL stock.  The other $82M does, in fact, get distributed to the other Nasdaq stocks according to the new weightings.  Do you think that doesn't distort the markets?  Of course, that doesn't "just" affect the Nasdaq – AAPL is a heavyweight in all the indexes.  

The special rebalancing of the NASDAQ-100 Index will be enacted based on index securities and shares outstanding as of March 31…
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PSW Wrap-Up Show for the Week

We have a new episode of The Wrap-Up Show.

This time, it’s a quick review of the week’s activity:

Also, as we have a ton of Government Data that will be driving the markets next week, let’s review "How the US Government Manipulates Inflation Data" – just so we remember not to take it all too seriously.  


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Wednesday – Working Toward the Clampdown

 

No man born with a living soul
Can be working for the clampdown
Kick over the wall 'cause government's to fall
How can you refuse it?
Let fury have the hour, anger can be power
D'you know that you can use it?

The voices in your head are calling
Stop wasting your time, there's nothing coming
Only a fool would think someone could save you 

In these days of evil presidentes
Working for the clampdown
But lately one or two has fully paid their due
For working for the clampdown – The Clash

Portugal is having a national strike today and labor unions in Ireland are planning “mass mobilization” in protest of planned spending cuts, with a march in Dublin on Nov. 27.

Portugal said in September it would cut the wage bill by 5 percent for public workers earning more than 1,500 euros ($2005) a month, freeze hiring and raise value-added taxes by 2 percentage points to 23 percent to help reduce a deficit that amounted to 9.3 percent of gross domestic product last year. The measures are included in the government’s 2011 spending plan, which faces a final vote in parliament on Nov. 26.  “The strike arises in a context of a set of measures that are quite significant and have social impact,” said Carlos Firme, a director at Lisbon-based Banif Banco de Investimento SA. “It’s natural that there are demonstrations of discontent.”

I'm sure King George's Bankster buddies told him the same thing when the American colonists expressed their "discontent" – Don't worry my King, there's sure to be some grumbling from the peasants but your stimulus package is working wonderfully – now come outside and check out the golden horseshoes I put on my carriage team!  

We were able to add a little bling to our own rides as those QQQQ $53 puts I told you about in yesterday's morning post, which we picked up in Member chat on Monday at .45, opened at .75 and flew on up to $1.25 (up another 110% from Monday's entry) and pulled back to finish the day at .98.  We were, of course, very happy to…
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ValueWalk

Warren Buffett & Bill Gates Discuss Success, Mistakes and Work/Life

By Jacob Wolinsky. Originally published at ValueWalk.

In this discussion, students from the University of Nebraska got to ask Bill Gates and Warren Buffett questions of their choosing. The questions vary widely and can be found below. Warren Buffett and Bill Gates are two of the richest people in the world and their answers and advice are invaluable to anyone looking for success.

Date: September 2005
Location: University of Nebraska

Audio is out of sync in parts.

Video Segments:

0:00 Start
0:01 Intro
3:14 Start of speech
...



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Zero Hedge

Forget Brexit, This Is The Ticking Time Bomb For The Markets

Courtesy of ZeroHedge. View original post here.

Low interest rates can be a great tool to get an economy in slow-down mode going again, but there always is an unwanted side effect. If credit becomes too cheap and available for just anyone, there’s bound to be ‘abuse’ in the system, as households (and companies) can spend the borrowed cash on anything they want.

We have already warned you before about the share buybacks on the financial markets, as the increasing ...



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Phil's Favorites

Merkel Once Again Not in Control

Courtesy of Mish.

This image of German chancellor Angela Merkel sums up the Brexit sentiment precisely.

The above image appears in the Financial Times article Brexit: Angela Merkel pushes back on EU pressure for quick divorce.

Angela Merkel, the German chancellor, has attempted to rein in pressure from within Europe to force Britain quickly to trigger divorce proceedings with the EU, saying that while “it shouldn’t take forever”, rushing into an exit was unwarranted.

Ms Merkel’s cautious words, coming during a day-long gathering of her CDU/CSU bloc, came in stark contr...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Central banks ready to cooperate after Brexit result (Business Insider)

Central banks are ready to cooperate to support financial stability in the wake of Britain's vote to leave the European Union, the Bank for International Settlements said on Saturday.

Central bankers gathered at the organization's global economy meeting in Switzerland discussed the implications of the referendum.

How Americans spend their day reflects a shifting economy and population (Wall Street Journal)

Americans overall are working less and sleeping more than they were a decade ago, trends that point to an aging p...



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Chart School

Best Stock Market Indicator Update

Courtesy of Doug Short's Advisor Perspectives.

We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.

As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money."

Latest Indicator Position

According to this system, the market ...



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Kimble Charting Solutions

2007 pattern being repeated right now? Another "Push Away???"

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The NYSE index kissed the underside of dual resistance at (1) back in 2008. Once resistance held, a big push away from it took place and sellers stepped forward.

NYSE creating a similar pattern again at (2)???

This would NOT be a good place for the Risk On trade if the broad market starts “pushing away” from dual resistance at (2).

Full Disclosure- ...



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Mapping The Market

Thoughts on Brexit

I have mixed feelings about Brexit today. Clearly the European institution need reforming. The addition of so many countries in the last 20 years has created a top heavy administration. The Euro adds more complexities to the equation as the ECB policies cannot fit every country's problem. On the other hand, a unified Europe has advantages as well – some countries have benefited from the integration.

For Britain, it's hard to say what the final price will be. My guess is that Scotland might now vote for independence as they supported staying in Europe overwhelmingly. Northern Ireland might be tempted to leave as well so possibly RIP UK in the long run. I was talking to some French people and they were saying that now there might be no incentive for France to stop immigrants from crossing over to the UK like they do now and simply allow for travel there and let the UK deal with them. The end game is not clear to anyone at the moment....



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Digital Currencies

Bitcoin Tumbles 10%

Courtesy of ZeroHedge. View original post here.

One week ago, when bitcoin first crossed above $700 on the seemingly insatiable Chinese buying which we forecast last September (when bitcoin was trading at $230) would take place as a result of China's capital controls (to much pushback by the "mainstream" financial media), we tried to predict what may happen next. We said that "it could go much higher. That said, anyone who bought last September when the digital currency was trading at $230 may be advised to take some profits, and at least make...



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OpTrader

Swing trading portfolio - week of June 20th, 2016

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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All About Trends

Mid-Day Update

Reminder: Harlan 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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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Promotions

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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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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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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