XLF – Financial Select Sector SPDR ETF – The familiar shadow of a put butterfly spread appeared in the August contract on the XLF, an exchange-traded fund designed to provide investment results that correspond to the price and yield performance of the Financial Select Sector of the S&P 500 Index, suggesting shares of the fund may continue to decline in the next couple of months to expiration. Shares of the ETF are currently down more than 3.7% to $13.96 with 25 minutes remaining ahead of the closing bell. The bearish put butterfly spread involved the purchase of 10,000 now in-the-money puts at the August $14 strike for a premium of $0.62 apiece [wing 1], and the purchase of 10,000 puts at the lower August $12 strike for a premium of $0.17 each [wing 2]. The investor sold 20,000 puts at the central August $13 strike for a premium of $0.32 a-pop [body]. The net cost of the pessimistic play amounts to $0.15 per contract, thus preparing the investor to make money if shares slip beneath the upper breakeven price of $13.85 ahead of expiration day in August. Maximum available profits of $0.85 per contract are safe in the investor’s piggy bank if shares of the underlying fund decline another 14% from the current price of $13.96 to settle at $12.00 at expiration. Options implied volatility on the XLF jumped 17.5% to 35.96% by 3:38 pm (ET).
CMA – Comerica Inc. – Shares of the financial services firm edged 3.45% lower to stand at $37.25 with just 20 minute remaining in the trading session. Bearish investors dominated activity in CMA options this afternoon, with nearly all of the day’s volume centering on the put side of the field. One investor purchased a debit put spread, buying 7,500 now in-the-money puts at the August $37.5 strike for a premium of $2.50 each, and selling the same number of puts at the lower August $32.5 strike for a premium of $0.80 apiece. The net cost of the spread amounts to $1.70 per contract, and prepares the investor to make money should Comerica’s shares decline another 3.90% to breach the average breakeven point to the downside at $35.80 by expiration day in August. Maximum potential profits of $3.30 per contract are available to the responsible party if CMA’s shares plummet 12.75% from the current…
A curious story, and one which should be taken with a mine of salt, has surfaced out of the pro-Russian newspaper Iskra, which reports - so far on an entirely unsubstantiated basis - that last Friday, in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.
Today was the beginning of “spring break” for the market. At least it seemed that way with a very low trading volume of only 600M shares on the NYSE. Either the college crowd does more trading than we imagined or parents are taking the week off as well.
The market barely woke up for the session with the S&P 500 down 0.05% and the NASDAQ down 0.03%. However, the DJI must have gotten extra sleep this weekend as it was up 0.21%. Small caps took a bigger hit with the Russell 2000 dropping nearly 0.50% percent. There was nothing major in the news other than a disappointing trading figure from China. Indeed, the whole week will only include a meager four major economic reports with Wholesale Inventories tomorrow, Retail Sales and Jobless Claims on Thursday, and Producer Price In...
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Imagine that you are speeding down one of those long and lonesome stretches of highway that seems to fall off the edge of the horizon. As the painted white lines become a blur, you notice a sign that says "Warning." You look ahead for what seems to be miles of endless highway, but see nothing. You assume the sign must be old therefore you disregard it, slipping back into complacency.
A few miles down the road you see another sign that reads "Warning: Danger Ahead." Yet, you see nothing in distance. Again, a few miles later you see another sign that reads "No, Really, There IS Danger Ahead." Still, it is clear for miles ahead as the road disappears over the next hill.
Here is a chart showing the number of transactions that involve acquisitions of an asset management business by year. It tells us about a couple of trends developing in recent years.
1. Increasingly asset managers are bought by other asset managers in strategic acquisitions (and to a lesser degree by financial sponsors).
2. Banks have stopped acquiring asset management businesses. In fact what the chart doesn't tell us is that banks have been actively selling their asset management businesses (especially in alter...
The dramatic moves in fuel cell related stocks continues this week, with shares in Plug Power (Ticker: PLUG), FuelCell Energy (Ticker: FCEL) and Ballard Power Systems (Ticker: BLDP) beginning the trading week with explosive gains ahead of FuelCell Energy’s first-quarter earnings report after the closing bell, and following on the heels of a large order from Walmart for Plug Power, which the company confirmed in a press release on February 26th.
Shares in PLUG rose as much as 38% to touch $11.41 this afternoon, marking a near 150% move to the upside in the price of the underlying since Monday morning of last week when the stock opened at $4.60....
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...
Nuverra Environmental Solutions (NYSE: NES) (“Nuverra” or “the Company”) today announced that it has entered into a definitive agreement to divest the Company's Industrial Solutions segment, Thermo Fluids Inc. (“TFI”), to VeroLube, Inc. (“VeroLube”). VeroLube is developing two re-refineries with a patented technology, and focusing on a consolidation of the used oil industry.
Under the terms of the agreement, Nuverra will receive $165 million in cash and $10 million in VeroLube shares. The cash portion of the transaction is subject to adjustment based on the actual working capital conveyed at closing. The sale is expected to close in the second quarter of 2014, subject to customary conditions, including regulatory approval and final confirmatory legal and enviro...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither MaddJack Enterprises, LLC
d/b/a PhilStockWorld (PSW) nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.