P - Pandora Media, Inc. – Shares in Pandora are spiking today, up as much as 8.3% in the early going to a one-month high of $17.78, after the stock was raised to ‘Outperform’ from ‘Market Perform’ at Cowen with a 12-month target price of $22.00. Options traders snapped up July expiry calls straight out of the gate this morning, initiating bullish positions that benefit from continued gains in the price of the underlying during the next few weeks. The Jul $17 strike options attracted the most volume in early trading, with roughly 3,600 calls in play versus open interest of 2,722 contracts as of 11:00 a.m. ET. Most of the calls appear to have been purchased by one strategist for a premium of $1.25 per contract. The call buyer makes money at expiration next month as long as Pandora’s shares rise 2.6% over today’s high of $17.78 to exceed the effective breakeven price of $18.25. Pandora bulls are also buying Jul $18 and $19 strike calls this morning, with roughly 900 of the $18 strike contracts purchased at an average premium of $0.72, and roughly 500 of the $19 strike calls picked up at an average premium of $0.37 apiece. Shares in Pandora are up 95% since the start of 2013.
APOL - Apollo Group, Inc. – Declines in new enrollments and slumping third-quarter profits reported by the University of Phoenix operator after the close on Tuesday sent shares in the name down substantially on Wednesday. The stock, which will relinquish its spot in the S&P 500 Index and make its way into the S&P Midcap 400 later in the week, fell as much as 8.9% to $17.66 in early trading. Contrarian traders positioning for shares in Apollo to snap back in the near term appear to be buying July expiry calls today. The Jul $19 and $20 strike calls were active in the early going this morning, with roughly 950 of the $19 calls purchased for an average premium of $0.71…
JCP - J.C. Penney Co., Inc. – Upside call buying in weekly options on J.C. Penney this morning suggest some traders are positioning for shares in the department store operator to rally during the final week of the year. Shares in JCP are up 2.65% at $20.11 as of 11:05 a.m. in New York, but are down more than 40% since the start of 2012. Fresh interest in weekly calls looks for shares in the retailer to extend this morning’s gains when the market reopens after the Christmas holiday. Volume is heaviest at the Dec. 28 ’12 $20 strike, where upwards of 3,500 calls changed hands against open interest of 1,469 contracts. It looks like most of the volume was purchased for an average premium of $0.68 each in the early going. In-the-money call buyers stand ready to profit at expiration this week should shares in JCP rally another 2.8% to top the average breakeven price of $20.68. Bullish positioning spread to the Dec. 28 ’12 $20.5 and $21 strikes, with more than 650 contracts purchased at each strike for average premiums of $0.45 and $0.28 apiece, respectively. Finally, around 275 of the Dec. 28 ’12 $22 strike calls were picked up at an average premium of $0.20 each, thus positioning buyers to profit in the event of a more than 10% move in the share price to $22.20 by expiration.
RPTP - Raptor Pharmaceutical Corp. – Shares in Raptor Pharmaceutical Corp. fell sharply in after-hours trading on Friday after the company said the U.S. Food and Drug Administration needs more time to complete its review of Raptor’s New Drug Application (NDA) for RP103 (PROCYSBI™), a potential treatment for nephropathic cystinosis, according to a press release issued by Raptor on Friday. Shares continue to slide on Monday morning, down 7% at $5.34 as of 11:25 a.m. ET. One or more traders preparing for Raptor’s shares to continue to slide in the New Year snapped up put options in the February expiry. Traders exchanged more than 750 puts at the Feb.…
ESRX - Express Scripts, Inc. – Sizable bullish bets in long-dated call and put options on the pharmacy benefit management services provider suggest shares in Express Scripts may sky-rocket over the next year and a half. Similar options combination plays were initiated at the end of last week following news Express Scripts agreed to purchase rival Medco Health Solutions Inc. for $29.1 billion in a deal that would make the company the largest U.S. pharmacy benefits manager. Shares in Saint Louis, MO-based Express Scripts slipped 0.60% during the first half of the trading session to $56.95 as of 11:50 am ET. The price of the underlying rallied as much as 12.0% to $57.47 on news of the merger agreement. Large prints in January 2013 contract on Friday appeared to be the work of an investor selling blocks of puts to partially finance the purchase of a bull call spread. The strategist responsible for the four-legged transaction rakes in maximum available profits on the trade if shares in ESRX top $70.00 at expiration. Heavy trading in the same expiry within the first hour of the opening bell indicates another options player may see shares in Express Scripts soaring to $80.00 during the next 18 months. The more recent long-term bullish combo trade on Express Scripts differs somewhat from that observed on Friday, but both transactions are looking for shares to reach all-time highs. The investor this morning appears to have sold 8,000 puts at the Jan. 2013 $42.5 strike for a premium of $2.19 each, spread against the purchase of an 8,000-lot Jan. 2013 $65/$80 call spread at a net premium of $3.34 per contract. The sale of the put options reduces the net cost of the three-way transaction to $1.15 per contract, thus positioning the investor to profit should shares in Express Scripts surge 16.2% over the current price of $56.95 to surpass the effective breakeven point to the upside at $66.15 at Jan. 2013 expiration.…
The world market rally continued last week with six of the eight indexes on my watch list posting gains. Europe led the pack, with Germany's DAX up 5.18%, France's CAC 40 up 3.44% and the UK up 1.45%. Hong Kong's Hang Seng was the big loser with its -2.70% loss. The other negative performer was Japan's Nikkei 225. It's fractional -0.76% decline snapped not only a four-week string of gains, but also four weeks as the top performer.
China's Shanghai Composite remains the only index on the watch list in bear territory -- the traditional designation for a 20% decline from an interim high. The index is down 28.36% from its August 2009 peak. See the table inset (lower right) in the chart below.
In what could definitely be called a stunning move, the Netherlands has announced it has repatriated in excess of 120 tonnes of gold from the vaults of the Federal Reserve in New York to the Dutch Central Bank in Amsterdam. Officially a move made to rebalance the locations where the gold is being stored, one cannot ignore the fact that the Netherlands only repatriated a large part of the gold which was stored in New York and it did not touch the gold stored in Canada and London.
Additionally, it’s not just ‘some’ gold being brought back home, no, the total amount is 122.47 tonnes or almost 4 million ounces with a market value of $5B. This will reduce the exposure of the Dutch Cen...
I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).
Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.
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).
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Investors in U.S. equities seem to have embraced a new market paradigm in which upside spikes come more swiftly than the downside selloffs. Remember when it used to be the other way around? When fear was stronger than greed? The market is consolidating its gains off the early-October V-bottom reversal, and no one seems to be in any hurry to unload shares this time around, with the holidays rapidly approaching and all. After all, there are bright blue skies directly overhead giving hope and respite from the early freeze blanketing the country.
In this weekly update, I give my view of the current market environment, offer...
If you would have supposed that Ukraine had enough problems to make banning bitcoins a backburner issue, you'd have been wrong. The rationale, "to protect consumers' rights" makes little to no sense... The other one, "to keep money in the country" makes more sense.
A four-year low for the spot price of gold has had a devastating impact on Yamana Gold (Ticker: AUY), with shares in the name down at the lowest price in six years. Some option traders were especially keen to sell premium and appear to see few signs of a lasting rebound within the next five months. The price of gold suffered again Wednesday as the dollar strengthened and stock prices advanced. The post price of gold fell to $1145 adding further pain to share prices of gold miners. Shares in Yamana Gold tumbled to $3.62 and the lowest price since 2008 as call option sellers used the April expiration contract to write premium at the $5.00 strike. That strike is now 38% above the price of the stock. Premium writers took in around 16-cents per contract o...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
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...
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.
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