Posts Tagged ‘ACI’

Thumbs-Up From Romney Sparks Bullish Activity In Arch Coal Calls

 

Today’s tickers: ACI & NFLX

ACI - Arch Coal, Inc. – Shares in Arch Coal, Inc., which traded down to their lowest levels of the past decade during the month of July, caught a bid on Thursday, energized by positive comments from Republican presidential candidate Mitt Romney during the presidential debate last night. Romney’s comments and the subsequent 8% rally in ACI shares to an intraday high of $6.72 this morning, stoked bullish activity in options on the coal producer as well. Options traders positioning for shares in Arch Coal to extend gains purchased around 5,000 calls at the Nov. $7.0 strike for an average premium of $0.43 apiece. Call buyers profit at expiration next month as long as shares in Arch Coal rally more than 10% to surpass the average breakeven price of $7.43. Bullish activity spread to the higher Nov. $8.0 strike where options players snapped up around 1,000 contracts at an average premium of $0.21 each. Traders long the $8.0 strike calls make money if shares in the coal company surge 22% over Thursday’s high of $6.72 to exceed $8.21 by November expiration. Current volume in Arch Coal options, topping 20,000 contracts as of 12:40 p.m. ET, is more than twice the stock’s average daily volume of 8,849 contracts. Call options comprise most of the volume, with around three calls changing hands on the stock for each single put option in play so far in the session.

NFLX - Netflix, Inc. – Short term bullish bets initiated on Netflix earlier this week have paid off for some options traders, with shares in the provider of online streaming video services soaring more than 20% since Monday morning on positive comments from T2’s Whitney Tilson and other analysts. Trading traffic in upside call options that have one full trading session remaining until expiration indicate some strategists are positioning for shares in NFLX to extend gains into the weekend. Shares in Netflix tacked on 6.6%…
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Michael Kors Options On Trend After Earnings Blowout

 

Today’s tickers: KORS, AMLN & ACI

KORS - Michael Kors Holdings Ltd. – A number of options strategists appear to have benefitted handsomely from bullish positions held in the House of Kors today, with shares in the luxury retailer ballooning on better-than-expected third-quarter earnings. Shares in Michael Kors Holdings Ltd. have more than doubled since the December IPO, trading 22.7% higher on the day at $41.25 as of 11:40 a.m. Options on Kors are abuzz with after-earnings activity, with around 3.6 call options changing hands for each single put option in play. Some traders that placed bullish bets on the retailer in the weeks leading up to earnings in some cases saw the value of their positions sky-rocket. One buyer of a 1,500-lot Feb. $34/$37 call spread at an average net premium of $1.05 per contract on Feb. 9th may reel in maximum possible profits on the position at expiration, given shares in KORS are now trading well above the upper $37 strike. Call open interest in the front month is heaviest at the $33 strike where more than 5,480 positions were opened before today. It looks like most of the volume was generated in a single block of 4,831 calls that traded at $1.15 each on Feb 7th. The calls traded to the middle of the market one week ago with the bid/ask showing $1.05/$1.30. Today, these deep in-the-money calls trade at bid/ask of $8.20/$8.40 as of 12:15 p.m. The impact of better-than-expected earnings on the shares certainly makes for a happy Valentine’s Day for the trader in the event he or she purchased the contracts last week or a rather Grey day were the calls originally sold. Finally, investors positioning for shares in Kors to extend gains snapped up in-the-money calls at the $40 strike in February and March, as well as picked up around 255 calls out at the May $44 strike at an average premium of $1.56 each.…
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Feeding Frenzy Erupts In HPQ Options

 

Today’s tickers: HPQ, MS, ACI & ARIA

HPQ - Hewlett-Packard Co. – Options covering Hewlett-Packard Co. are densely populated today on news the company’s board is meeting to discuss ousting CEO, Léo Apotheker, less than one year after he was hired to replace former-HPQ CEO and current co-President of Oracle, Mark Hurd. Hope that a shakeup may get HPQ back on track, and speculation that the board may select former eBay CEO, Meg Whitman, to head the company, sent shares in the trodden-down stock up as much as 11.7% today to $25.10. Options implied volatility on Hewlett-Packard earlier rose to 56.05%, but currently stands 20.05% higher on the session at 53.47% as of 1:40 pm ET.

Investors have now exchanged more than 205,000 option contracts on HPQ, with much of the activity taking place in the front month. Calls are trading roughly 1.8 times to each single put option in play thus far in the session. In-the-money calls are popular with buyers positioning for shares to appreciate, while out-of-the-money calls suggest more of a mixed picture. Trading traffic in HPQ calls is heaviest at the October $25 strike, where upwards of 26,100 contracts changed hands against open interest of 11,574 positions. The Oct. $25 strike call was bought and sold in roughly equal numbers. Similar two-way trading is apparent in the Oct. $26 and $27 strike calls, but trading in deep out-of-the-money calls in the October contract was dominated by sellers. Meanwhile, investors positioning for shares to potentially surrender today’s gains in the next several weeks to October expiration, snapped up in- and out-of-the-money puts. Volume in the Oct. $23 strike put soared to 30,000 contracts in early-afternoon trade, trumping previously existing open interest of 3,737 lots. Buyers of the bearish options paid an average premium of $0.89 per…
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Arch Coal Set to Rebound?

Today’s tickers: ACI, MHS & JPM

ACI - Arch Coal Inc. – We’re scratching our heads trying to fathom out why an investor is plundering deeply monied put options in Arch Coal on Friday. Shares in the mining behemoth have slumped recently and indeed today have filled a technical gap to the November high at $26.62. Buyers have resumed and the stock could easily land in the black today. Yesterday investors drove shares lower after the company announced the issuance of $1.3 billion worth of fresh stock to be partially used to finance the purchase of International Coal Group later in June. The secondary IPO was offered at a discount to an already weakening market cap to entice buyers and once swallowed, one investor appears to be banking on a recovery. A credit put spread was deployed earlier Friday with an investor taking in a net premium of $1.35 by writing the $30 puts and buying the less costly $28 puts. We can only assume that this bull expects a rebound to lift the stock back above $30 rendering both options worthless leaving him holding the cash.

MHS - Medco Health Solutions Inc. – A rally in healthcare company, Medco saw its shares surge from $51.80 in late-March to $64.92 in mid-May. This week it cratered back to $56.50 before steadying and today its shares stand at $58.27 having lost a contract to provide the Federal Employee Program (FEP) with mail-order and specialty pharmacy benefits. FEP awarded its 2012 contract to CVS Caremark instead and follows the loss of a key contract to provide Calpers employees with health services. A call option butterfly expiring in July has one bold option trader banking on a summer rebound to $65.00. The investor bought 12,000 calls at each of the $60 and $70 strikes…
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Weekly Wrap-Up – Buffett’s Daring Derivative Deal Does Well

I was going to talk about Buffett's annual letter to investors.

Fortunately, I procrastinated and other people did some detailed reporting like Ravi Nagarajan, Andy Fry, Scott Patterson and Joe Del Bruno – who does a great job of pointing out that Berkshire's 4th quarter results were propped up by Buffett's $1.05Bn gains in derivatives betting (something Buffett himself once called "weapons of mass financial destruction" but, as we well know – if you can't beat them…), which accounted for 1/3 of Berkshire's $3.06Bn profits

Buffett's biggest bet was selling a put against the S&P 500 back in March – a move I said at the time was BRILLIANT and Buffett himself now says about his own options trading:  "We are delighted that we hold the derivatives contracts that we do.  To date, we have significantly profited from the float they provide. We expect also to earn further investment income over the life of our contracts."  

What did Buffett do?  Exactly what we teach you to do here at PSW - he took advantage of an irrational move in the markets and SOLD INTO THE EXCITEMENT, getting a fat premium from some sucker that bet the S&P would not hold 666 5 years from now.  Buffett effectively sold $5Bn worth of puts that expires worthless at S&P 700 between 2019 and 2027, putting $5Bn in his pocket and holding aside $1Bn in margin, which is how much he's already ahead on the bet.  Like a good options trader, he has a plan and he's trading his plan, making sure his investment is on track and patiently letting time do it's work as it eats away at the put-holder's premium. 

What about the risk?  Well I can't speak for Buffett's stop-loss technique but we're talking about a company that has (had) $40Bn in cash using their excess margin to make a $5Bn bet that the S&P would not stay below 700 for 10 years.  Buffett and I both tell people – NEVER buy a stock (or sell a put against one) that you are not willing to own for 10 years.  The S&P was 5% below at the time and would have had to drop, perhaps, 20% more to cost him $1Bn so let's call the stop 550 on the S&P where Buffett risked 2.5% of his cash against a posible 400% gain on his $1Bn risk allocation over 10+ years.  While it is true that if the
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Option Bulls Covet Coal-Calls on ACI

Today’s tickers: ACI, MGM, EWJ, HSY, YHOO, TIE & GLD

ACI - Far-term option bulls were not discouraged from establishing optimistic positions on the coal producer today despite the nearly 2% decline in shares during the trading session to $17.84. Investors looking for shares to rally significantly by the start of 2010 purchased 2,000 calls at the January 23 strike for an average premium of 70 cents apiece. ACI would need to rally 33% higher for individuals long these calls to breakeven at $23.70 by expiration. Option traders also picked up 2,000 calls at the April 2010 22 strike for 1.50 per contract. Finally, curious call spreads appeared in the January 2011 contract. The trades were a bit blurred but it seems likely that the activity represents a ratio call spread. If this is the case, the investor responsible for the trade purchased about 3,000 calls at the January 30 strike for 1.40 each. These contracts were spread against the sale of some 6,000 calls at the higher January 35 strike for 93 cents premium. The trader receives a net credit of 46 cents on the transaction. He will retain the full credit and add to that amount if shares rally higher than $30.00 by expiration. Maximum potential profits on the spread amount to 5.00 (excluding the credit received today), achieved in the event that shares of ACI surge a whopping 96% from the current price by expiration in January 2011. – Arch Coal, Inc. –

MGM - The casino operator attracted bullish bets by option traders today amid a more than 7.5% rally in shares to $10.13. Notable near-term call interest was apparent at the September 11 strike price where more than 7,100 lots exchanged hands. Approximately 5,500 of the contracts were purchased for an average premium of 23 cents apiece. Investors long the calls will begin to accrue profits if shares of MGM can rise 11% higher to surpass the breakeven point at $11.23 by expiration in less than two weeks. Traders clearly favored MGM calls over puts during the session as evidenced by the call-to-put ratio of more than 3-to-1 on the stock today. – MGM Mirage, Inc. –

EWJ - The EWJ jumped onto our ‘most active by options volume’ market scanner this afternoon after one investor juggled massive chunks of calls on the stock. Shares of the exchange-traded fund are currently up 0.5% to $10.18. The trader…
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Phil's Favorites

Johnson & Johnson vaccine suspension - what this means for you

 

Johnson & Johnson vaccine suspension – what this means for you

Vials of the Johnson & Johnson vaccine to prevent COVID-19. The use of this particular vaccine has been halted temporarily. Justin Tallis/AFP via Getty Images

Courtesy of William Petri, University of Virginia

The Centers for Disease Control and Prevention and the Food and Drug Administration on April 13, 2021 halted use of the one-dose Johnson & Johnson COVID-19 vaccine that has been given to 6.8 million people in the U.S. The pause is...



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Biotech/COVID-19

Johnson & Johnson vaccine suspension - what this means for you

 

Johnson & Johnson vaccine suspension – what this means for you

Vials of the Johnson & Johnson vaccine to prevent COVID-19. The use of this particular vaccine has been halted temporarily. Justin Tallis/AFP via Getty Images

Courtesy of William Petri, University of Virginia

The Centers for Disease Control and Prevention and the Food and Drug Administration on April 13, 2021 halted use of the one-dose Johnson & Johnson COVID-19 vaccine that has been given to 6.8 million people in the U.S. The pause is...



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ValueWalk

UK's First-Time Buyers See House Prices Climb

By Jacob Wolinsky. Originally published at ValueWalk.

First-time buyers paying as much as £73k more to get on the ladder since the market reopened

Q1 2021 hedge fund letters, conferences and more

The Climbing Cost Of Houses For First Time Buyers

Research by the new build snagging and defect management experts, ...



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Zero Hedge

Trading Bonds In Venezuela? Bring A Gunman And Cash

Courtesy of ZeroHedge View original post here.

The Venezuelan bond market - described by Bloomberg as one of the 'tiniest and almost certainly the most primitive' in the world - is also one of the most dangerous.

Based in Caracas where Nicolas Maduro's socialist government is 'ever so slowly freeing up the battered economy' for capitalistic endeavors, the US dollar has become the defacto currency. Yet, there's no electronic method to electronically transfer USD from one bank to another - which mean...



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Digital Currencies

Coinbase Sets Reference Price At $250, Well Below Last Private Market Trade

Courtesy of ZeroHedge

Ahead of tomorrow's much-anticipated direct listing of massive crypto-exchange Coinbase, Nasdaq has just announced the company's so-called Reference Price at $250.

On April 14, 2021, the Class A common stock of Coinbase Global, Inc. is expected to list on Nasdaq through a Direct Listing using the ticker “COIN”.

Because this security has not previously traded on any listing market and has no prior day's closing price, Regulation SHO Rule 201 will not apply to the security until its second day of trading on Nasdaq.

As a Direct Listing, COIN will be in a regulatory halt until ...



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Kimble Charting Solutions

Semiconductor Red Hot Performance Tests 20-Year Breakout Level

Courtesy of Chris Kimble

Will the “Red Hot” semiconductor index cool off or get even hotter due to the shortage of chips?

This chart looks at the Semiconductor Index on a monthly basis over the past quarter-century. No doubt the trend is up as it has created a series of higher lows and higher highs since 2009.

Fibonacci extension levels were applied to the 1996 lows and the 2000 highs. Currently, the index is testing the 261% extension level, while at the top of the rising channel as momentum is at the highest level since the 2000 highs.

The rare chip shortage coul...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The Biden Yellen team have made their play, and it is not US dollar friendly.

Janet Yellen speech named "International Priorities — Remarks to The Chicago Council on Global Affairs" (here) can be summed to (via Luke Gromen) :


The US is accelerating a move away from "subjugating the US middle and working class to support the USD", to "subjugating the USD to support the US middle and working classes".



Well the above is true, but as we all know large US deficits and the trend of the US dollar are joined at the hip, and that trend is down '...

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Politics

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

 

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

Russian police officers beat people protesting the jailing of opposition leader Alexei Navalny, Jan. 23, 2021 in Moscow. Mikhail Svetlov/Getty Images)

Courtesy of Shelley Inglis, University of Dayton

Russian dissident Alexei Navalny, sick with a cough and ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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Promotions

Phil's Stock World's Weekly Webinar - March 10, 2021

Don't miss our latest weekly webinar! 

Join us at PSW for LIVE Webinars every Wednesday afternoon at 1:00 PM EST.

Phil's Stock World's Weekly Webinar – March 10, 2021

 

Major Topics:

00:00:01 - EIA Petroleum Status Report
00:04:42 - Crude Oil WTI
00:12:52 - COVID-19 Update
00:22:08 - Bonds and Borrowed Funds | S&P 500
00:45:28 - COVID-19 Vaccination
00:48:32 - Trading Techniques
00:50:34 - PBR
00:50:43 - LYG
00:50:48 - More Trading Techniques
00:52:59 - Chinese Hacks Microsoft's E...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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