PFE - Pfizer, Inc. – Shares in the world’s largest drug maker are up sharply on Tuesday, trading 3% higher on the session at $27.65 as of 11:10 a.m. ET, the highest level in more than five years. Pfizer’s shares are rallying after the company posted better-than-expected fourth-quarter earnings ahead of the opening bell and forecast2013 earnings above analyst estimates. The stock has gained more than 17.5% since mid-November. Heavy trading traffic in Pfizer call options this morning suggests traders are positioning for shares in the name to extend gains during the next couple of months. February expiry calls are changing hands at a clip, with notable volume exceeding open interest at the Feb. $28 strike price. Most of the Feb. $28 calls in play appear to have been purchased for an average premium of $0.08 each. Meanwhile, the single-largest print in PFE call options, a block of 24,500 contracts, traded at the Mar. $28 striking price. It looks like one strategist purchased the call options at a premium of $0.17 each during the first 20 minutes of the trading day. Overall call volume at the Mar. $28 strike exceeds 28,500 contracts as of 11:30 a.m. ET, trumping open interest of 9,870 contracts. Traders long the upside calls stand ready to profit at March expiration should Pfizer’s shares increase another 2.0% to surpass the breakeven point at $28.17.
DFS - Discover Financial Services, Inc. – Bearish options on credit card issuer and electronic payment services provider, Discover Financial Services, are active this morning with shares in the name trading 0.5% lower on the session at $37.87 as of 11:35 a.m. ET. March expiry put options are the most actively traded contracts on Discover today, with upwards of 9,400 lots in play at the $37 strike versus open interest of just 33 contracts. It looks like one or more traders purchased the bulk of the volume for an average premium of $0.91 each. Put buyers may profit at expiration in six weeks in the event that shares in DFS slump nearly…
LZ - Lubrizol Corp. – It looks like a well-timed bullish bet on Lubrizol Corp. initiated in April contract calls less than one week ago paid off big time for one options strategist following the announcement of Berkshire Hathaway’s $9 billion acquisition of the specialty-chemicals company this morning. Shares in Lubrizol Corp. shot up as much as 27.3% during the session to hit an intraday and all-time high of $134.20, which is just 80 pennies shy of the $135.00 a share deal reported today. Options volume on the stock is heaviest at the April $110 strike where one trader appears to have raked profits in off of the table within the first 20 minutes of the opening bell. Open interest patterns at that strike suggest around 2,650 calls were picked up for an average premium of $2.35 per contract back on March 9, 2011, when shares in the Lubrizol closed the session at a $106.55. The purchase of the calls, which were the closest-to-the-money contracts available at the time of the transaction, cost the investor around $622,750. Since then, news of the deal with Berkshire Hathaway sent shares in the chemical company soaring, driving up the value of the now deep in-the-money April $110 call options. It looks like the investor sold the 2,650 calls this morning at a premium of $23.90 per contract. Net profits on the sale amount to $21.55 per contract, or a grand total of $5,710,750. Lubrizol’s overall reading of options implied volatility came crashing down today, and currently stands 88.3% lower at 3.75% as of 11:35am in New York.
AFL - Aflac, Inc. – Shares in the U.S.-based insurance provider, which provides health and life insurance to a large portion of the Japanese population, fell 3.80% to $53.44 by 1:00pm in New York trading. The stock earlier declined more than 6.0% to touch down at an intraday low of $52.12. Investors bracing for further bearish movement in Aflac’s shares picked up April $50 strike…
NEM – Newmont Mining Corp. – Shares of the gold mining company are up 2.90% to $51.74 this afternoon as gold stocks across the board rallied along with the price of the previous metal. Newmont’s shares recovered significantly since reaching a low point for the year 2010 of $42.87 back on January 29, 2010. The current price per NEM share of $51.74 represents an impressive 20.65% rally over its January low of $42.87. One options trader populating our screens today expects the good times at Newmont Mining to continue through March expiration. The investor purchased a debit call spread by picking up 5,000 calls at the March $55 strike for a premium of $0.52 apiece, marked against the sale of 5,000 calls at the higher March $57.5 strike for $0.17 each. The net cost of the transaction amounts to $0.36 per contract. The trader is prepared to pocket maximum potential profits of $2.14 per contract should Newmont’s shares rally another 11.15% to $57.50 by expiration day. Shares of the underlying stock must increase at least 7% from the current price in order for the call-spreader to breakeven on the trade at $55.36 per share.
EWZ – iShares MSCI Brazil Index ETF – Bearish options positioning on the Brazil exchange-traded fund, which generally reflects the price and yield performance of securities in the Brazilian market as measured by the MSCI Brazil index, indicates one investor is bracing for a pull back in the price of the underlying shares by April expiration. Shares of the underlying fund are trading 1.85% higher to $70.97 with approximately forty-five minutes remaining in the session. The trader sold 10,000 calls at the April $72 strike for a premium of $2.55 apiece in order to partially offset the cost of purchasing 10,000 put options at the lower April $70 strike for $2.73 each. The investor paid a net premium of $0.18 per contract for the bearish risk reversal transaction. The pessimistic play yields profits to the trader if shares of the EWZ trade beneath the breakeven price of $69.82 ahead of expiration in April. We note that shares traded as low as $62.79 on February 8, 2010, and failed to rally above $70.00 until the current session’s breakout.
ZION – Zions Bancorp. – A bullish options player celebrated the 2.80% rally in ZION’s share…
I’ve been a long time investor in the solar space (circa late 06) and one thing that has really irked me over the years is the complete lack of differentiation. Much like the market as a whole nowadays, its "all or nothing" in this space. The one exception has been First Solar (FSLR) – an American "thin film" (different technology than most solar companies) producer. The Chinese names have especially all been thrown together in one pot and when its time to run up solar, they all go up together (in varying degrees) and when solar is out of favor they all get pole axed. Hence doing any due diligence is really a waste of time.
Yingli Green Energy (YGE) and a company that has cost me many real (and virtual) dollars over the years, Trina Solar (TSL) are 2 of the Chinese solar markets with good size, and the most integrated production models. This should have differentiated them over the years – but as I said above, not in American investors eyes. We like "big easy to understand, sweeping themes" – i.e. oil up, solar good. And that’s as comprehensive as it seems to get.
We are seeing some nice action in both these names today, on the back of an analyst report which is alluding to the advantages the two companies have. Now that silicon (which is the main cost component on the material side) has swooned after bottlenecks plagued the industry for 3+ years, the other main cost is labor. And you are not going to compete with the Chinese on labor costs…
Both Trina Solar (TSL) and Yingli Green Energy(YGE) shares are trading higher today following upgrades by Morgan Stanley analyst Sunil Gupta. He thinks both companies are going to take market share in the solar sector from U.S.-based and European rivals. Here are the details
The S&P 500 went nowhere today, snapping a decelerating two-day rally. Trading action exhibited virtual paralysis, the second narrowest intraday trading range of the year to date. Why? With one day to go before the Memorial Day weekend, the market's focus is probably what Janet Yellen will say after she receives this year's Radcliffe Medal, presented annually to an individual who has had a transformative impact on society. Will she give us any clues about a rate hike? The 500 ended the session with a 0.02% loss.
The yield on the 10-year note closed at 1.83%, down four basis points from the previous close.
In a world where fundamentals don't matter, everyone's attention will be on Janet Yellen who speaks at 1:15pm today in Harvard, hoping to glean some more hints about the Fed's intentionas and next steps, including a possible rate hike in June or July. And with a long holiday in both the US and UK (US bond market closes at 2pm today), it is no surprise overnight trading volumes have been dreadful, helping keep global equities poised for the highest close in three weeks; this won't change unless Yellen says something that would disrupt the calm that’s...
By Jacob Wolinsky. Originally published at ValueWalk.
Donald Trump will be good for economy, bad for Wall Street: David Rosenberg
Published on May 25, 2016
Live from the 2016 Strategic Investment Conference
Get the latest updates live from the sold-out 2016 Strategic Investment Conference with John Mauldin, Richard W. Fisher, David Rosenberg, James Grant, Niall Ferguson, George Friedman, Pippa Malmgren, Charles Gave, Neil Howe, and many more. Click go to following link to visit the conference’s live blog:
Hello, everyone who has joined us on the second day of SIC 2016. It’s going to be a long and exciting day. Today, we’ll hear speeches from George Friedman, Lacy Hunt, David Rosenberg, and other well-known financial and political experts. We’ll also do video interviews with each speaker, and all of th...
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Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?
Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.
I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.
I was thinking of this since a buddy of mine recently started ...
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.
Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,
The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now.
And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now.
Phil writes back,
I was expecting them to start throwing poop at each other &n...
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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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