UA - Under Armour, Inc. – Options on the athletic apparel maker are more active than usual today, with volume of 11,300 contracts running more than four times the stock’s 90-day average options volume of 2,475 contracts. Shares in Under Armour are down 0.80% at $98.19 in early-afternoon trade, slipping Tuesday after hitting a new all time high of $99.35 on Monday. Options traders exchanging around 2.5 calls on the name for each single put in play so far in the session appear to be positioning for the price of the underlying to continue to secure fresh highs in the next few weeks. In- and out-of-the-money calls in the front month are seeing the most action, with the April $95 and $97.5 strike calls trading upwards of 1,100 times each. Traders positioning for fresh record highs in the price of the stock snapped up more than 500 calls at each of the April $105 and $110 strikes, paying premiums of $1.00 and $0.33 apiece, respectively. Call buyers may profit at expiration should Under Armour’s shares post sharp gains prior to the Company’s first-quarter earnings report on April 24th. The April contract calls expire several days ahead of UA’s earnings release. Traders long the call options may profit at April expiration as long as Under Armour’s shares surge 6.7% and 11.1% to top average breakeven prices of $106.00 and $110.33, respectively.
AIG - American International Group, Inc. – Shares in AIG have mostly traded within the range of $20.00 to $30.00 during the most recent six month period. Activity in long-dated call options on the insurer, however, suggests one strategist is positioning for the price of the underlying to break out strongly to the upside at some point during the next ten months. Shares…
ORCL – Oracle Corp. – Shares of the software company rallied as much as 1.45% this afternoon to touch an intraday high of $25.75, which is just $0.88 below the stock’s current 52-week high of $26.63. Options activity on Oracle is quite active ahead of the firm’s first-quarter earnings report scheduled for release after the closing bell tomorrow evening. One options investor hoping to see Oracle’s shares extend gains through the start of 2011 initiated a delta neutral hedge in the January 2011 contract. It looks like the trader purchased a total of 12,500 puts at the January 2011 $21 strike for a premium of $0.45 apiece, tied to the purchase of a large number of ORCL shares for $25.65 each, on a 0.15 delta. The long position in shares suggests perhaps that the investor expects tomorrow’s earnings report to lift shares and/or foresees continued bullish movement in the price of the underlying stock over the next 5 months. But, the put options serve as a type of insurance policy for the trader in case Oracle’s shares falter going forward. Options investors exchanged more than 77,800 contracts on the software maker by 3:10 pm ET.
DV – DeVry, Inc. – The for-profit operator of colleges and universities popped up on our ‘hot by options volume’ marker scanner after one investor initiated a call spread in the November contract. DeVry’s shares fell as much as 2.9% in the first half of the trading session to touch down at an intraday low of $41.25, but made a strong recovery in early afternoon trading, and currently stand 1.25% higher on the day at $43.01 as of 12:52 pm ET. The investor populating the November contract wisely established a contrarian debit call spread on the stock when shares were still in the red. The options strategist purchased 2,000 calls at the November $45 strike at a premium of $2.00 each, and sold the same number of calls at the higher November $50 strike for premium of $0.65 apiece. Net premium paid to purchase the spread amounts to $1.35 per contract. The investor is positioned to make money if DeVry’s shares rally another 7.8% over the current price of $43.01 to surpass the effective breakeven point at $46.35 by expiration day in November. Maximum potential profits of $3.65 per contract are available to the call-spreader if…
CRM – Salesforce.com, Inc. – A large-volume ratio call spread on the provider of customer relationship management services this afternoon implies one options investor expects CRM shares to rally significantly by August expiration. Salesforce.com’s shares increased as much as 1.83% today to reach a new 52-week high of $81.23 during the current session. According to a Reuters report this weekend, analysts at Deutsche Bank maintain their ‘buy’ rating on the stock and raised their share price target on CRM to $110 from $100. The optimistic options trader populating the stock this afternoon purchased 13,000 calls at the August $85 strike for a premium of $5.00 apiece, and sold 26,000 calls at the higher August $100 strike for $1.05 each. Net premium paid by the investor for the transaction amounts to $2.90 per contract. Maximum available profits of $12.10 per contract accumulate for the trader if shares of the underlying stock surge at least 23% from the new 52-week high of $81.23 to reach $100.00 by August expiration. The investor starts to make money as long as CRM’s shares trade above the effective breakeven point at $87.90 ahead of expiration day.
CPB – Campbell Soup Co. – Options traders anticipating a sharp increase in the price of Campbell Soup Co.’s shares by November expiration scooped up record numbers of call options on the global manufacturer and marketer of branded convenience food products today. CPB’s shares traded 0.25% higher in late afternoon trading to $35.45, which is just off their current 52-week high of $35.80 (attained back on December 2, 2009). Campbell-bulls purchased approximately 5,200 calls at the November $40 strike for an average premium of $0.55 per contract. Investors holding these contracts are prepared to profit should Campbell’s share price jump 14.4% from the current price to exceed the average breakeven point to the upside at $40.55. Investors exchanged roughly 5,925 option contracts on CPB during the trading session, which represents 56% of the total existing open interest on the stock of 10,567 lots.
VALE – Vale S.A. – Diverse bullish options strategies employed on Brazilian metals and mining company, Vale S.A., today indicates investors are expecting the price of the iron-ore maker’s shares to appreciate in the next few months. Vale’s shares rallied 1.20% at the start of the session to an intraday high – and new…
America’s descent into totalitarian violence is accelerating. Like the Bush regime, the Obama regime has a penchant for rewarding Justice (sic) Department officials who trample all over the US Constitution. Last year America’s First Black President nominated David Barron to be a judge on the First US Circuit Court of Appeals in Boston.
Barron is responsible for the Justice (sic) Department memo that gave the legal OK for Obama to murder a US citizen with a missile fired from a drone. The execution took place without charges presented to a c...
Traders hadn't forgotten the events of last week and were quick to sell their positions in the face of tomorrow's NFP data.
Today's close in the S&P left a bearish inverse doji (gravestone doji), marking supply above 1,950. Bears will feel confident heading into tomorrow's data, assuming Thursday's 1,975 high is not breached. The downside target is a retest of 1,867. A move higher will set up a challenge of 2,044.
The Nasdaq had a quieter day. It didn't suffer the same wide range as the S&P, but today's close finished with a bearish 'cloud cover' over yesterday's trading. Shorts will be liking the risk:reward for a ret...
China watchers are taking a breather with the nation's markets closed to commemorate the end of World War II. Attention now turns to today's European Central Bank monetary policy meeting in Frankfurt and Friday's U.S. jobs report. Global stocks, as measured by the MSCI All-Country World Index, gained for a second session after after a two-day 3.3 percent drop.
Can you believe that its a really big deal to some if an index is down 9.9% from it highs (non correction territory) or if its down 10.1% (correction territory). Does .2% constitute that we make a different allocation decision? Are you kidding me?
Do you find yourself agreeing more with the person on the left or right? I am in the camp with Lou on the right. Should we make investment decisions based upon a term (correction)? Not me
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The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...
With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.
Stock market sell off surprises some while others were prepared and are hedged prospering
Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
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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