Posts Tagged ‘UAL’

Air Carrier Options Active As Shares Lose Altitude

A second consecutive down day for shares in airline stocks spurred heavy trading traffic in options across the largest market-cap names, including United Continental Holdings, Inc. (Ticker: UAL), Delta Air Lines, Inc. (Ticker: DAL), American Airlines Inc. (Ticker: AAL), and JetBlue Airways Corporation (Ticker: JBLU). Shares in these air carriers are down roughly 6.0%, 5.0%, 5.5% and 4.0%, respectively, as of the time of this writing amid higher oil prices and in the wake of Lufthansa’s cut to its 2014 profit guidance on Wednesday.

Options on American Airlines and Delta Air Lines are seeing the most volume overall with more than 55,000 contracts traded on each, while JetBlue is experiencing the highest volume relative to its average daily options volume. Volume in JBLU options is nearing 40,000 contracts just before midday in New York, which is approximately four times its average daily reading of around 9,200 contracts.

Meanwhile, smaller air carrier, Hawaiian Holdings, Inc. (Ticker: HA), Hawaii’s biggest and longest-serving airline, with a market cap of around $816 million (vs. roughly $33 billion market-cap for Delta Air Lines and $29 billion for American Airlines), also attracted heavier than usual options activity. Upwards of 4,100 contracts have changed hands on Hawaiian Holdings as of 11:30 am ET, which compares to average daily volume for the stock of around 640 contracts. Shares in HA are down 3.5% on the session at $14.65 as of the time of this writing. Hawaiian shares on Monday of this week traded up to a record high of $16.49. 

As the chart below shows, shares in the air carriers mentioned have lost some altitude lately, but the stocks are still up, in some cases significantly, for the most recent six month period.

Chart – Six-month chart of AAL, DAL, UAL, JBLU & HA

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UAL Call Options Active As Shares Hit Record High

UAL – United Continental Holdings Inc. – Airline stocks are bucking the trend on Thursday, flying high amid a down day for U.S. equities. Shares in United Continental Holdings increased as much as 12.6% during the first half of the session to a record high of $46.19 following the release of the company’s December operational results and after several analysts raised their fourth-quarter earnings estimates on the carrier.

Trading in UAL call options expiring this month and next suggests some traders may be positioning for the price of the underlying to continue to climb in the near term. The 17 Jan ’14 $46 and $47 strike calls traded more than 900 times by midday in New York, trumping open interest levels in each case. Time and sales data suggests most of the calls were purchased, with the average asking premium paid for the $46 strike calls near $0.83 each and $0.39 per contract on the $47 strike calls as of the time of this writing.  The 21 Feb ’14 $46 strike call options also attracted fresh interest, with around 1,400 lots traded against open interest of 100 contracts. It looks like most of the volume was purchased at an average premium of $2.27 each. Traders snapping up the February expiry $46 calls may be looking for the stock to rally leading up to and perhaps following the company’s fourth-quarter earnings report, which is likely to be released in two weeks time. Buyers of the Feb $46 calls stand ready to profit at expiration next month in the event that UAL shares rally 7.6% over the current price of $44.85 to exceed the average breakeven point on the upside at $48.27.


Which Way Wednesday – $3.5Tn Not Enough to Prop up Markets?


Wasn't it just 2 days ago that the EU was all set to pop the ESM to $1.25Tn and the IMF was going to add another Trillion and the Fed was talking about more QE in the $1.25Tn range, which plunged the Dollar to multi-week lows?  Shouldn't adding 6% of the entire planet's GDP in additional stimulus give us more than a one-day pop in the markets? 

As I pointed out in Monday's Morning Alert to Members – these are all just RUMORS and my conclusion in the Alert was: 

Despite the bullish turn of events (which we anticipated last week) we're more inclined to cash out our bullish trades into the excitement and press our bear bets and TOMORROW, if we're still over our levels – THEN we will scramble to add some aggressive bullish trades to our virtual portfolios.  Again, I cannot stress enough that CASH is my preferred position because this market is tough to call and you need to be very flexible and very nimble to trade it.

SPY 5 MINUTEWe proceeded as planned and, so far, we haven't had any reason to capitulate and get more bullish and that is both surprising and disappointing as this is the end of the first quarter of 2012 – if not now – when?  As David Fry notes

Monday’s rally was typical as we head toward the end of the quarter. Hedge fund performance fees are on the line and any way to boost these profits is job one. Top holdings for hedge funds include the usual suspects: AAPL, IBM, INTC, BAC, DIS, HD etc.

With little volume it’s easy for algos and hedge funds to prop stocks on little hard news. Tuesday we briefly saw more of this. Just as markets were weakening a story appeared using the Fed’s favorite oracle, the WSJ, as Fed governor Rosengren stated, “more stimulus is on the table”. Immediately HFT algos jumped and markets rose if only briefly. 

It's very exciting for us as PLCN (see Thursday's notes) went all the way up to $736 on Monday and sold off on some pretty heavy trading yesterday.  Slowly but surely, our negative premise is beginning to take shape as Piper Jaffray is finally catching up with us and noting "a sharp decline in unique visitors to Priceline's" from growth of 61 percent during the…
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Options Strategist Positions for a United Continental Rally

Today’s tickers: UAL, HBC, ALTR & GPS

UAL - United Continental Holdings, Inc. – A three-legged options combination play on United Continental suggests one strategist expects the price of the underlying to rebound by June expiration. Shares in UAL are down 2.25% at $20.75 as of 12:05pm in New York trade. The contrarian player is positioning for the medium-term rally by lowering the cost of buying a debit call spread with the sale of out-of-the-money put options. The trader sold 10,000 puts at the June $19 strike, to buy the 10,000-lot June $22/$26 call spread, for which he received a net credit of $0.10 per contract. The investor at least keeps the net credit as long as shares in UAL exceed $19.00 through expiration day. Additional profits are available to the bullish trader in the event that United Continental’s shares reverse course to rally 6.0% over the current price of $20.75 to trade above $22.00 in the next couple of months to expiration. Including the net credit, the investor may pocket maximum potential profits of $4.10 per contract on the transaction if the price of the underlying stock jumps 25.3% to exceed $26.00 at expiration in June.

HBC - HSBC Holdings PLC – It looks like one options investor raised bullish expectations on Europe’s biggest bank this morning with shares in HSBC Holdings currently trading 1.0% higher on the session at $54.44 as of 11:25am. The financial services provider’s shares were higher in European trading as well on sentiment that upcoming results from a government-sponsored Independent Commission on Banking will be less thorny than some investors initially anticipated. The trader responsible for the majority of options volume generated on HBC thus far today appears to be rolling a previously established bullish stance up to the next available strike price in the…
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Options Trader Positions for Airline Recovery Story

Today’s tickers: UAL, HBI, SFLY & TOL

UAL - United Continental Holdings, Inc. – The airline operator’s shares rose 4.3% this morning to an intraday high of $23.76, rebounding 9.7% off of its lowest point of the week at $21.65, but still trading substantially lower than last week’s closing price of $27.02. Shares relinquished some of the earlier gains this afternoon to stand 1.65% higher on the session at $23.16 as of 12:15pm in New York. At least one options strategist is positioning for UAL’s shares to continue recovering in the next couple of months. It looks like the investor employed April contract ratio call spreads to prepare for a sizable, albeit limited, correction higher by expiration day. The trader appears to have purchased approximately 3,000 in-the-money calls at the April $22 strike for an average premium of $2.49 apiece, and sold roughly 6,000 calls up at the April $27 strike for an average premium of $0.52 each. The net cost of the transaction amounts to an average of $1.45 per contract, and positions the trader to profit in the event that UAL’s shares rally 1.25% over the current price of $23.16 to surpass the average breakeven point on the upside at $23.45 by April expiration. Maximum potential profits of $3.55 per contract are available to the trader should shares in United Continental Holdings jump 16.6% to settle at $27.00 at expiration in a couple of months. The sale of twice as many higher-strike call options expose the investor to losses should the stock fly higher than he expects within the time remaining to expiration. Profits give way to losses on this strategy if shares in UAL jump 31.9% to exceed the upper breakeven price of $30.55 by April expiration day. The call options transacted in the ratio spreads represent opening positions given the minimal levels of open interest observed at either strike price.…
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Bull Eyes New Highs in United Continental Shares by Year’s End

Today’s tickers: UAL, KSS, ANN, KO, SINA, XLF, FRX & OI

UAL - United Continental Holdings, Inc. – The world’s largest carrier jumped up on our ‘most active by options volume’ market scanner earlier today after one bullish options player purchased a large call spread in the December contract. Shares in United Continental rose 0.90% this afternoon to trade at $27.42 as of 3:00 pm. The investor purchased approximately 11,200 calls at the December $29 strike for a premium of $0.72 each, and sold the same number of calls at the higher December $31 strike at a premium of $0.32 each. Paying a net $0.40 per contract for the spread, the investor is prepared to profit should shares in UAL surge 7.2% over the current price of $27.42 to surpass the effective breakeven point to the upside at $29.40 by expiration day. The trader is poised to accumulate maximum potential profits of $1.60 per contract, roughly $1.792 million, if the airline operator’s shares jump 13.05% and trade above $31.00 by expiration in December.

KSS - Kohl’s Corp. – Massive prints in Kohl’s Corp. call and put options caught our eye this afternoon. Shares of the department store operator that sells nationally recognized as well as privately branded goods increased as much as 4.165% in the second half of the session to touch an intraday high of $52.76. It looks like the investor responsible for the mammoth transaction sold 50,000 puts at the December $50 strike for a premium of $0.85 each, and purchased the same number of calls up at the December $57.5 strike at a premium of $0.30 apiece. The risk reversal was tied to the sale of 2.15 million shares of the underlying stock at a price of $52.12 on a 0.43 delta. The investor receives a net credit…
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Financial Markets and Economy

Here's your complete preview of this week's big market-moving events (Business Insider)

It's the first week of the last month of 2015, and that means there's a lot of economic data on deck.

First, we'll get finalized numbers on Thanksgiving weekend and Black Friday sales. Preliminary estimates from RetailNext and ShopperTrak show sales were down in the low single-digits.

Think of Debt as Pollution (Bloomberg View)


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Swing trading portfolio - week of November 30th, 2015

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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Zero Hedge

Paul Craig Roberts Rages At The "Arrogance, Hubris, & Stupidity" Of The US Government

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

On the heels of the Chinese stock market plunging 5.5%, continued turmoil in the Middle East and the price of gold hitting 5 year lows, former U.S. Treasury official, Dr. Paul Craig Roberts told Eric King of King World News that Putin and the Russians are now dominating in Syria and the Middle East as the West destroys itself.

Dr. Paul Craig Roberts:  “It could well be that this is going to work out so much in Russia’s favor that Putin will send a letter of thanks to the Turkish President and say, &lsquo...

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Digital Currencies

The Bitcoin Universe Explained

Courtesy of ZeroHedge. View original post here.

As evidenced by the Greek, Chinese, and now Argentine 'jumps', the world remains increasingly aware of the inevitable worth of fiat currencies and fears the desperate acts of governments as the react to that reality (and is looking for alternatives).

This infographic explains the wide ranges of the Bitcoin universe, accompanied with quotes from some of its best-known business leaders.

Courtesy of: Visual Capitalist ...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

The Fed just tweeted a brutal chart showing the sorry state of US department stores (Business Insider)

It's Black Friday, which means American consumers everywhere are knocking down doors in their efforts to take advantage of what they perceive to be a good deal.

Oil prices fall more than 3% as dollar and oversu...

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Kimble Charting Solutions

Does Black Friday Matter For Gains The Rest Of The Year?

Courtesy of Chris Kimble.

We are entering one of the most bullish times of the year historically.  As we mentioned last week, the final 30 trading days of the year have been higher each of the last 12 years.


Getting to today, it is Black Friday – the official start to the holiday spending season.  We’ve seen many stats that show this day isn’t quite as important as it once was.  From many sales now starting on Thanksgiving, to Cyber Monday this coming Monday – there are other times people are looking for the best deals.  None the less,...

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Chart School

Greatest risk to the stock market is?

Courtesy of Read the Ticker.

Nope it is not interest rates, nope it is not Donald Trump, it is!

It is the CRUDE OIL crash, simple!

Jim Willie has good comments in the first 40 min of this pod cast.

Energy company ...
- Debt is blowing up (See energy element of HYG).
- Hedging at oil $100 is coming to an end.
- Iran coming back to the market, more supply.
- Saudi still providing massive supply.
- Oil tankers holding oil parked in the ocean are coming in to harbor to unload
- US dollar strength supports lower oil prices
- World wide DEMAND slump for energy or deflation.
- More oil being sold outside the US Dollar
- The Oil futures can not be manipulated easily as folks actually ...

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All About Trends

Mid-Day Update

Reminder: David 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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Sector Detector: Bulls wrest back control of market direction, despite global adversity

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

Courtesy of Sabrient Systems and Gradient Analytics

Some weeks when I write this article there is little new to talk about from the prior week. It’s always the Fed, global QE, China growth, election chatter, oil prices, etc. And then there are times like this in which there is so much happening that I don’t know where to start. Of course, the biggest market-moving news came the weekend before last when Paris was put face-to-face with the depths of human depravity and savagery. And yet the stock market responded with its best week of the year. As a result, the key issues dominating the front page and election chatter have moved from the economy and jobs to national security and a real war (rather than police ...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Baxter's Spinoff

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

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).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

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. 


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Help One Of Our Own PSW Members

"Hello PSW Members –

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 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.

Thank you for you time!

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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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