Posts Tagged ‘PETM’

PetSmart Calls Active Ahead Of Earnings

Trading in upside call options on PetSmart (Ticker: PETM) today suggests some options players may be positioning for shares in the pet supplies retailer to rally following the company’s fourth-quarter earnings report on Wednesday ahead of the open. PETM opened the session lower amid a down day for U.S. stocks, but are currently in positive territory, up 0.30% on the day at $67.27. Options volume is nearly four times the stock’s average daily level, with overall volume hovering near 4,000 contracts as of the time of this writing.

The most traded options by volume on PetSmart are the Mar $70 strike calls after some 3,600 of the contracts appear to have been purchased most at a premium of $0.90 each. Buyers of the $70 calls stand ready to profit at expiration this month in the event that shares in PETM rally another 5.0% over the current price of $67.27 to exceed the breakeven point at $70.90. Shares in PetSmart last traded above $70.90 back on January 3rd.


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PetSmart Puts In Play As Shares Extend Declines

 

Today’s tickers: PETM, FURX & SPLS

PETM - PetSmart, Inc. – Shares in the specialty retailer of products and services for pets and their owners fell sharplythis morning on a downgrade to ‘reduce’ from ‘neutral’ at Nomura, with the stock currently trading 7.4% lower on the session at $64.81 as of 11:25 a.m. ET. A sizable bearish options strategy initiated on PetSmart in the early going suggests one trader is bracing for shares to extend declines during the next couple of months. It looks like the strategist purchased a 2,000-lot March $60/$65 put spread for a net premium of $1.55 per contract. The bearish position starts making money if shares in PETM decline 2.1% from the current price of $64.81 to breach the effective breakeven point at $63.45. Maximum potential profits of $3.45 per contract are available on the spread in the event that shares drop more than 7.4% to settle below $60.00 at April expiration. Two weeks ago we noted a similar bear put spread initiated on PETM; the similar-sized position was an April $60/$65 put spread purchased at a net premium of $1.80 per contract. Both positions result in maximum possible profits if shares in PetSmart drop to $60.00 by expiration in March and April.

FURX - Furiex Pharmaceuticals, Inc. – Shares in Furiex Pharmaceuticals are soaring today, up 52% to stand at $32.33 just before midday in New York, after the company confirmed that its partner, Japanese firm Takeda Pharmaceutical Co., received approval from the U.S. FDA for three new type 2 diabetes therapies designed to treat the disease in adults in combination with diet and exercise. Furiex options, which typically see daily volume of around 33 contracts on average, are far more active than usual on news of the approval, with volume topping 1,685 contracts during the first half of the session. Put options are more active than calls, with roughly two puts in play for each single call option. The stock this morning rallied 55% to an all-time high of $32.97, but had already started making moves to the upside at…
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Synthetic Put Bearish On Constellation Brands

 

Today’s tickers: STZ, PETM & XRT

STZ - Constellation Brands, Inc. – A large stock and options combination play on wine, beer and spirits producer, Constellation Brands, Inc., appears to be a synthetic put on the name that benefits from bearish movement in the price of the underlying in the near term.Shares in STZ, up roughly 80% since mid-June 2012, are currently down 1.1% on Monday afternoon to stand at $35.24 as of 12:05 p.m. in New York trading. The hefty transaction in STZ options today pushed overall options volume to a level well above the stock’s average daily options volume of around 13,100 contracts. The largest transaction in STZ options appears to be the purchase of a 20,000-lot Feb. $37.5/$42.5 call spread for an average net premium outlay of $0.75 per contract, tied to the sale of STZ shares at $34.80 on a 25.5 delta.The synthetic put position is a bearish strategy that prepares the trader to profit from declines in the price of Constellation Brands’ shares through February expiration.

PETM - PetSmart, Inc. – Shares in the specialty retailer of products and services for pets and their owners are in negative territory on the first trading session of the week, down 1.0% at $67.50 as of 11:30 a.m. ET on Monday. A sizable bearish options strategy initiated on PetSmart today suggests one trader is bracing for shares to potentially extend declines during the next few months. It looks like the strategist purchased a 2,000-lot April $60/$65 put spread for a net premium of $1.80 per contract. The bearish position starts making money if shares in PETM decline 6.4% from the current price of $67.50 to breach the effective breakeven point at $63.20. Maximum potential profits of $3.20 per contract are available on the trade in the event that shares drop more than 11% to settle below $60.00 at April expiration. PetSmart’s shares last traded below $60.00 in May 2012.

XRT - SPDR S&P Retail ETF – The…
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Aeropostale Options Active As Shares Gain On Abercrombie’s Earnings Beat

 

Today’s tickers: ARO, WYNN & PETM

ARO - Aeropostale, Inc. – Shares in teen retailer, Aeropostale, Inc., are up 6.2% this morning at $13.87 in sympathy with Abercrombie & Fitch after that company raised its guidance for full-year earnings and reported better-than-expected third-quarter results before the opening bell on Wednesday. Aeropostale, which acquired online women’s apparel and shoe retailer GoJane.com yesterday, is scheduled to report third-quarter earnings after the close of trading on November 29th. ARO call options are buzzing with activity today, with some traders adjusting existing positions, while others take profits and establish bullish stances on the stock ahead of earnings in two weeks. One strategist responsible for the purchase of approximately 2,000 Nov. $14 strike calls for a premium of $0.10 apiece back on October 31st appears to be selling the calls today for three times that amount, or $0.30 in premium per option contract. Meanwhile, the purchase of more than 2,000 upside calls out at the Dec. $14 strike for a premium of $1.00 apiece looks for shares in ARO to extend gains in the near term. The trader or traders picking up the Dec. $14 strike calls may profit at expiration next month if shares in Aeropostale rally another 8% to surpass the average breakeven price of $15.00 at expiration. Call buying spread to the Dec. $15 and $16 strikes as well, with more than 500 contracts purchased at each strike earlier in the trading session. Interest in the Dec. $14, $15 and $16 strike calls today adds to positions established during the prior trading week.

WYNN - Wynn Resorts Ltd. – Trading traffic in call options on casino resort operator, Wynn Resorts Ltd., this morning suggests one strategist is positioning for shares in the name to rally substantially by year end. Shares in Wynn Resorts are down 1.2% this morning to stand at $105.67 as of 11:50 a.m. ET. The most active contracts on WYNN by volume so far today are the…
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JPM Weekly Options Active; OTM Puts Pop On SLV As Silver Slump Continue

 

Today’s tickers: JPM, SLV & PETM

JPM - JPMorgan Chase & Co. – A New York Times report that said JPMorgan’s trading losses could reach $9 billion sent ripples across financial stocks on Thursday morning and pushed shares in the largest bank down as much as 4.1% to $35.26 in the first half of the session. Interest building in the newly issued weekly options contracts on JPM today suggests some strategists are positioning for the price of the underlying to make moves, either to the upside or downside, next week. Out-of-the-money put buying, particularly in the July 06 ’12 $32 and $34 strikes, looks for shares in the financial services provider to extend declines. Traders snapping up around 1,200 of the $34 put options for an average premium of $0.26 each profit at expiration next week should shares slip another 4.3% and settle below the breakeven price of $33.74. Low-probability bearish bets are on the rise at the July 06 ’12 $32 strike, with more than 500 puts purchased for a premium of $0.08 apiece. The value of these contracts could rise rapidly in the days ahead should JPM’s shares continue to come under selling pressure. On the flip side, traders buying far out-of-the-money weekly calls on the stock may see profits if the price of the underlying reverses course. Traders ready to benefit from a rebound in the stock price next week purchased around 850 of the $37 strike call for an average premium of $0.10 each and more than 220 of the $38 strike call for $0.05 apiece. Shares in JPM are hovering around their lows of the session as of midday in New York.

SLV - iShares Silver Trust ETF – Shares in the silver ETF have tanked since last summer, falling more than 40% from a 52-week high of $42.78 in August 2011, down to today’s current price and fresh 52-week low of $25.46. A burst of put buying on SLV…
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Red Hat Calls Active Prior To Earnings

 

Today’s tickers: RHT, TSCO & PETM

RHT - Red Hat, Inc. – The software maker popped up on our scanners this morning after sizable trades were initiated in the front month calls. At first glance the activity could be mistaken for a pre-earnings bullish bet on shares in Red Hat ahead of the Company’s fourth-quarter release after the final bell on Wednesday. However, the transaction is likely bearish on RHT as the April expiry call activity appears to be tied to the sale of stock. Shares in Red Hat are up 1.7% at $52.74 in early-afternoon trade. The strategist responsible for the largest trade in RHT options appears to have purchased a 3,848-lot April $55/$57.5 call spread at a net premium of $0.75 per contract. The debit call spread was established seconds before a block of 50,000 shares in RHT sold at $52.70. The stock and options combo play positions the trader to profit on the short stock leg as long as Red Hat’s shares pullback sufficiently from the $52.70-level to offset the cost of buying the options. Meanwhile, the call spread hedges the position, protecting the trader from losses to the upside in the event that shares extend gains.

TSCO - Tractor Supply Co. – Shares in the largest U.S. retail farm and ranch store chain jumped 5.4% on Monday to hit a new 52-week high of $90.66. The Brentwood, Tennessee-based Company is scheduled to present at the Telsey Advisory Group’s 4th Annual Spring Consumer Conference on Wednesday morning. Options activity on Tractor Supply Co. this morning suggests some traders are positioning for the price of the underlying to extend gains in the near term. Around 795 calls changed hands at the May $95 strike against open interest of 51 contracts. It looks like most of these calls…
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Impending Q3 Earnings Report Spurs Demand for Viacom Options

Today’s tickers: VIA B, BJ, MRK, EEM, PETM & C

VIA B - Viacom, Inc. Class B – Options on the global entertainment content company are active ahead of the release of the firm’s third-quarter earnings report before the opening bell tomorrow. Investors are establishing both bullish and bearish positions on Viacom using near-term put and call options. Viacom’s shares are currently up 0.15% at $38.09 with just fewer than thirty minutes remaining in the trading session. Traders fearing the price of the underlying stock could fall following earnings initiated bear put spreads. Put players picked up approximately 3,000 in-the-money puts at the November $38 strike for an average premium of $0.77 each, and sold about the same number of puts at the lower November $36 strike for an average premium of $0.14 a-pop. Average net premium required to purchase the spread amounts to $0.63 per contract. Thus, investors are prepared to profit, or realize downside protection, in the event that shares in Viacom fall 1.9% from the current price of $38.09 to breach the average breakeven point at $37.37 by expiration day. Maximum potential profits of $1.37 per contract are available if VIA’s shares plunge 5.5% lower to trade below $36.00 by November expiration. Meanwhile, investors taking bullish stances ahead of earnings looked to the November $39 strike to purchase approximately 1,600 calls for an average premium of $0.32 per contract. Call buyers profit if Viacom’s shares rally 3.2% to surpass the average breakeven price of $39.32 by expiration day.

BJ - BJ’s Wholesale Club, Inc. – Reports that the warehouse club operator is considering hiring an advisor to review options including a potential sale to a leveraged-buyout firm in a deal that could net as much as $3 billion sent shares flying higher today and drew speculators to the…
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Thoughtful Thursday Morning

Maybe I am being too bearish on the economy.

Maybe there is a shining city on the hill with 1,000 points of light and if I simply close my eyes and believe in it, I will be transported there and everything will be wonderful and China will expand and Europe will expand and the US markets will rise and rise as the 18M unemployed people line up in the streets to cheer us as we all drive past them in our new cars as we head over to the gas station to pay $4 for gas, honking joyfully as we pass by each empty storefront and each abandoned home

It was good to take quick bearish profits, as I warned in yesterday's post because quick profits are all the bears get these days as it was indeed a "Whipsaw Wednesday," and Buffett's warning went in one ear and out the other of investors so quickly that clearly there was no gray matter slowing it down along the way!  I was very proud of our short plays on COF, HPQ, RTP, SRS, RTH and our DUG long but all had a half-life on their success so short you could have run an atomic clock with it.  Fortunately, we had our bounce levels to guide us and our 3 of 5 rule to get out of bearish positions so the damage was more to our pride than our virtual portfolios.

Although I could see the turn in my 9:45 Alert to Members, I didn't have the heart to make any bullish calls as it just seemed like such nonsense.  By 10:12 we were even more concerned that something was up and I said: "Don’t get too excited bears.  As I said in the post, profits need to come quickly off the table – this is not a market for riding 20% profits too far."  Sadly, I then proceeded to make a short play on OIH at 10:26 that stopped out at 10:34 and an incredibly poorly timed idea to get the DIA $93 puts at 11:22, just minutes before the market went flying and stopped that one out too as we flew through our bounce zone of Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555.   Now that they've held up so well, those levels now become our watch levels to the downside and it makes…
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Genworth Financial Rallies Amidst Reversal Positioning Through Options

Today’s tickers: GNW, ERTS, RCL, WFT, PETM, BBY, AKAM, KR, & FITB

GNW – Bearish option trades belie the more than 6% rally in shares of the financial security company to $8.59 during today’s trading session. It appears that one investor has spread the sale of 10,000 calls at the December 10 strike price for 1.00 apiece against the purchase of 10,000 puts at the September 7.5 strike for about 56 cents each. The bearish reversal play occurred in the midst of plain-vanilla put purchasing at the September 7.5 strike, where approximately 8,000 puts were picked up for 56 cents per contract. Perhaps investors enacting such trades are bracing for a pullback in the price of GNW by expiration in September. The long puts will begin to generate profits if the stock slips 19% lower through the breakeven point at $6.94. The investor responsible for the bearish reversal has received a net credit of 44 cents and may add to his profits if the September 7.5 strike puts land in-the-money by expiration. The short call position in the December contract leaves the investor vulnerable to potentially unlimited losses above the effective breakeven point at $10.56, unless of course the trader holds a long position in the underlying. If the trader owns the stock, then he may be near-term bearish and long-term bullish. The short call position would serve the same purpose as a covered call. If GNW trades above $10.00 by expiration, the investor may shed the position in the underlying and walk away with profits earned on the appreciation in the value of the stock. – Genworth Financial, Inc.

ERTS– Bullish reversals on the developer of video game software caught our attention today amid a rally of nearly 4% on the stock to $21.11. Investors were seen shedding puts in order to finance the purchase of out-of-the-money calls in the December contract. Approximately 2,500 puts were sold at the December 16 strike for 43 cents each, while another 2,500 puts were surrendered at the higher December 17 strike for 62 cents apiece. Traders utilized premium enjoyed on the sale of puts to get long of 5,000 calls at the December 25 strike price for an average premium of 93 cents. The average net cost of purchasing the calls amounts to about 40 cents per contract. A rally in ERTS of 20% will allow call-holders to begin to amass
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Zero Hedge

Japan TV Shows Footage Of US Aircraft Carrier Just Hours Away From Korea

Courtesy of ZeroHedge. View original post here.

After a mangled deployment of Trump's aircraft carrier "armada" during which miscommunication between the White House and the Pentagon meant the USS Carl Vinson would arrive off the North Korea coast weeks after what Trump had initially suggested, on Saturday Japan's public broadcaster NHK aired footage of the U.S. aircraft carrier sailing off the coast of Nagasaki prefecture in southern Japan, hours after the latest failed ballistic missile test by North Korea..

...



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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

How North Korea gets its oil from China: lifeline in question at U.N. meeting (Reuters)

As the United Nations Security Council decides whether to tighten the sanctions screws on North Korea, the country's increasingly isolated government could lose a lifeline provided by state-owned China National Petroleum Corp (CNPC).

Anything-But-Soft Earnings Data Starting to Smack of Rally Years (Bloomberg)

Among the spate of bullish trends visible after three weeks of earnings reports: analysts, who almost always cut full-year estimates in April, are now raising them, p...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Top investor bets against 'dizzying' American stocks (The Telegraph)

Donald Trump’s election has put fire in the belly of the US stock market. Investors have become excited about the dealmakers in his administration and his plans to cut taxes and spend big on roads and other infrastructure projects.

The hottest thing in the markets right now is an obscure metal mined in DR Congo (Quartz)

The financial markets have an unlikely new hero. In recent months, the best way to make a serious amount of money in a short amount of time has been to buy cobalt.

...

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Digital Currencies

Is The Blockchain About To Disrupt This $7 Trillion Industry?

By Teeka Tiwari, International Man

[Posted at Zero Hedge]

Recently, I wrote about a small $100,000 trade of cheese and butter.

Why?

This one trade changed 400 years of history in just four hours.

How so? Normally, it would take 10 days to handle the paperwork. But this trade concluded in less than fou...



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ValueWalk

The First (and Last?) Competitive Advantage

By VWArticles. Originally published at ValueWalk.

Farnam Street Q1 letter to investors

Also see

2017 Hedge Fund Letters Hedge Fund Letters: 2016

The First (and Last?) Competitive Advantage

“Capitalism is a pretty brutal place.”

– Charlie Munger

]]> Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email ...



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Kimble Charting Solutions

Gold Miners; Largest outflows in history could be bullish, says Joe Friday

Courtesy of Chris Kimble.

Could historical outflows present an opportunity? Yesterday Sentimentrader.com reported that outflows from Gold Miners ETF’s GDX and GDXJ topped $800 million on 4/26, the largest single day outflows in history. 

Below looks at Gold Miners ETF GDX, reflecting where these large outflows took place.

CLICK ON CHART TO ENLARGE

The long-term trend since...



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Chart School

Semiconductors Tick Along

Courtesy of Declan.

It was another quiet day for indices but the Semiconductor index was able to add over 1% on the day. This also helped post gains to the Nasdaq 100, although there was a relative gain for the Semiconductor Index against the latter index.


The Nasdaq 100 registered an accumulation day despite its underperformance against Small Caps. The index remains well placed to make a move to upper channel resistance.

...

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OpTrader

Swing trading portfolio - week of April 24th, 2017

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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Members' Corner

Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

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Biotech

CAR-T & CRISPR - the Future is Now

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

PSW Members....it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T - stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar...



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Promotions

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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Some other great content in this free eBook includes:

 

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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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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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