Posts Tagged ‘ACOR’

Bearish Options Traders Take to Caterpillar Put Options

 Today’s tickers: CAT, KONG, ACOR & AXL

CAT - Caterpillar, Inc. – The machinery maker’s shares fell during the past five trading sessions and started out this week on the decline, as well. Shares in CAT fell briefly this morning, but reversed course to rally as much as 1.8% to an intraday high of $108.27. But, the rebound in the price of the underlying stock today may not be a lasting trend according to some options players initiating bearish stances on Caterpillar today. It looks like one pessimist purchased a put spread, buying around 3,000 puts at the June $100 strike for a premium of $1.39 each, and selling the same number of puts at the lower June $90 strike at a premium of $0.26 a-pop. The net cost of initiating the spread amounts to $1.13 per contract. Thus, the trader starts making money if CAT’s shares drop 8.7% from today’s high of $108.27 to breach the effective breakeven point on the spread at $98.87 by expiration in June. Maximum potential profits of $8.87 per contract are available to the investor should shares plummet 16.9% to trade below $90.00 at expiration next month. Longer-term bearish sentiment appeared in January 2012 contract put options. One trader purchased 5,000 deep out-of-the-money puts at the January 2012 $72.5 strike for a premium of $1.59 each. Rising levels of options implied volatility on CAT as well as bearish movement in the share price will benefit the investor by lifting premium on the puts, while the erosion of time value on the long position will work against him. The puts may have been tied to stock. Options traders are exchanging roughly 1.6 put options on the stock today for each single call option in play as of 12:30pm in New York.

KONG - KongZhong Corp. – The Beijing, China-based wireless media company popped up on our scanner this morning due to predominantly bearish activity in June contract options. Shares in KongZhong Corp. plunged 24.9% during the session to touch an intraday…
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Iron Condor Crops Up on Tyco International Ltd.

Today’s tickers: TYC, JWN, ACOR & MRO

TYC - Tyco International Ltd. – An investor expecting shares in Tyco International to remain range bound over the next couple of months constructed an iron condor on the industrial products company using call and put options expiring in April. Shares in Tyco are currently up 0.40% to stand at $46.98 as of 10:40am in New York. The options strategist appears to have sold the 900-lot April $48/$50 call spread to pocket an average net credit of $0.55 per contract, in combination with the sale of the 900-lot April $43/$45 put spread for an average net credit of $0.35 per contract. The iron condor yields a total net credit of $0.90 per contract, which the investor keeps in full as long as shares in Tyco International trade above $45.00 and below $48.00 through April expiration. Buying the higher-strike calls and the lower-strike puts reduces the harvestable premium on the short legs of the transaction, but also caps losses for the investor in case the position moves against him at some point. The investor faces maximum potential losses of $1.10 per contract if shares either rally above $50.00, or slip beneath $43.00 ahead of expiration day in April.

JWN - Nordstrom, Inc. – Shares in specialty fashion retailer, Nordstrom, are up 1.55% at $47.20 this morning following the firm’s better-than-expected fourth-quarter earnings report after the close of trading on Thursday. Nordstrom said it earned $1.04 a share in the quarter, beating average analyst estimates of $1.00 a share. Additionally, the retailer reported it is buying the online private sale marketplace HauteLook, which has some 4 million members, for $180 million in stock. Nordstrom is reportedly the first department store chain to purchase one of the limited-time deal, or ‘flash-sale’, websites. Trading in JWN by one…
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Investor Appetite for China-Biotics Put Options Rises as Shares Nosedive

 Today’s tickers: CHBT, JPM, ACOR & PLCM

CHBT - China-Biotics, Inc. – Demand for put options on the food products company jumped at the start of the session and continued to grow throughout the trading day with shares of the probiotics products maker dropping as much as 15.7% to hit an intraday low of $14.90. As of 1:25pm, the overall reading of options implied volatility on the stock has climbed 108.1% to 124.23%. Investors piled into put options right out of the gate this morning, exchanging more than 6,470 contracts at the February $15 strike on open interest of 1,400 lots. It looks like the majority of these puts, at least 3,600 of them, were purchased for an average premium of $1.71 each. Put buyers at this strike start to make money if shares in the Shanghai-based company fall another 10.8% off of today’s low of $14.90 to breach the average breakeven point to the downside at $13.29 by expiration day next month. Pessimism on the stock spread to the lower February $12.5 strike where some 2,300 puts were picked up at an average premium of $0.71 apiece. Investors holding these contracts stand prepared to profit in the event that China-Biotics’ shares plunge 20.9% to trade below the average breakeven price on the puts at $11.79. The sale of some 1,100 call options at the February $15 strike for an average premium of $1.91 per contract is also a sign of near-term bearish sentiment on CHBT. More than 22,440 options have changed hands on the stock in early afternoon trade on overall previously existing open interest of 36,277 contracts.

JPM - JPMorgan Chase & Co. – A massive call spread purchased on JPMorgan in the first 15 minutes of the trading session suggests one bullish strategist expects shares in the name to rally substantially ahead of March expiration. Shares in the financial services firm are up 0.60% to stand at $45.02 just before 11:15am in New York, but earlier increased as much as 1.8% to touch…
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Prior Weekly Wrap-Up – February Expiration Day Special!

I didn't get to do a wrap-up last week so we have a lot of trades to go over and, with expiration looming and the Fed tightening, I thought it would be good to just get the list out on Friday so we can adjust our rolls to March where neccessary (in bold under appropriate positions).

In our Feb 7th Wrap-Up, I was gung-ho bullish saying "It's Only a 55-Point Drop You Wimps!" and we had  been BUYBUYBUYing at the bottom all week, especially Wed-Fri as the market spiked through our projected support at Dow 10,000 but not enough to change our minds as we bottom-fished on AAPL (2 trades), ABX, ACOR, AKAM, AMED, BRK/B (2), C, CCJ (3), CSCO, DELL, FXI, GE,  GOOG, IBM, LLY, LOW, NLY, TBT (5 times!), TM (3), TNA, USO (yep, we wen long oil) and UYG.  To say we were weigting bullish by that Monday was an understatement as we has finished the weekend in a bullish stance and were relying on our disaster hedges to protect us

Those disaster hedges are an interesting set to look at, especially now that we've recovered 400 points:

  • DXD July $27/33 bull call spread at $2.50, now $2 – down 20%

    • We can roll the $27 calls to the $25 calls for $5 to widen the spread and drop our b/e from $29.50 to $28.50
  • EDZ July $3/8 bull call spread at $2.10, now $1.60 - down 23%
  • EDZ Apr $10 calls sold for .70, now .15 – up 78% (pair trade)
  • SDS 2011 $36/40 bull call spread at $1.30, now $1 – down 18%

    • We can roll the $36 calls to the $33 calls for $1.10
  • TBT Jan $35/45 bull call spread at $6.30, now $7.40 - up 17%
  • TBT March $50s sold for .65, now $1.22 – down 87% (pair trade)

This is what is great about disaster hedges.  The potential upside on these spreads, if the market headed south was up about 100% on the 4 trades so a commitment of 5% of your virtual portfolio to each one (20%) would give you back 40% of your virtual portfolio in cash if the markets tanked.  Already, after 2 weeks, we have the markets heading in the opposite direction and what is the cost?  Not even 20% of…
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Weekly Wrap-Up, it’s Only a 55-Point Drop You Wimps!

That's right, I said WIMPS! 

I have never heard so much whining and crying and complaining about a market drop as I have the past few weeks.  Last week, I pointed out that we had only fallen 105 points from the prior week (10,172 to 10,067) and this week we fell ALL THE WAY to 10,012 to finish the week and you would think the world was ending (again) from the way the MSM has been acting.

By Friday the panic was palpable as we gave up Monday and Tuesday's bogus gains to test new lows for the year – testing, in fact, the lowest levels the market has hit since last November and I pointed out in Friday's post that it reminded me of when BSC and LEH went under and everyone panicked and sold Financials off to the point where Warren Buffet was willing to give GS $5Bn AFTER they bounced 50% – THAT's how undervalued the financials were in November of 2008. 

Fear and Greed are market driversWhat do we do while people are panicking?  We BUY!  We don't BUYBUYBUY like Cramer's Pavlovian Peons but we sure do BUY and take some nice entry positions with sensible hedges.  I was finally motivated to finish updating our Buy List on Friday and 18 of our 38 positions were highlighted (immediately actionable) on Friday.  Sure they may go lower, but we're buying them with 20% buffers built into the positions and then we can double down if they drop 40% (back to Nov 2008 lows) and then we'll have our entries down 10% from the lowest levels of the past decade or so that we can hold until the next decade – what's there to panic over?

If I wanted to buy IBM in January but thought it was a little pricey at $134, why would I not be HAPPY to have the opportunity to make an enty at $122, back at where they were pre FABULOUS October earnings?  I can buy IBM for $122 and take advantage of the panic-induced VIX at 26 to sell July $125 calls for $6.60 and the July $120 puts for $6.65 for a net entry of $108.75 with a call away at $125 for a $16.25 profit (15%) in 5 months.  If
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Bears Bombard Wells Fargo with Pessimistic Option Plays

Today’s tickers: WFC, GS, EWZ, EK, CHRW, BIDU, CBY, ACOR, INTC, EK & EAT

WFC – Wells Fargo & Co. – Bearish traders lumbered around Wells Fargo today purging calls and feasting on out-of-the-money put options. Pessimistic positions were initiated during the trading session despite the 1.5% move up in shares of the underlying to $29.02. Investors piled into put options at the February $23 strike where roughly 23,000 contracts were purchased for an average premium of $0.13 apiece. Perhaps put buyers are merely securing cheap downside protection in case WFC’s shares fall off the proverbial cliff by expiration next month. Traders may be expecting a pull back in shares of the financial firm. If the puts were purchased as an outright bearish bet on the stock, investors long the contracts could turn profits by selling the puts before expiration next month if premium levels on the lots appreciate above $0.13. Medium-term pessimism was apparent in the April contract where traders shed 4,700 calls at the April $32 strike for an average premium of $0.66 each. Additional bearishness took place at the April $28 strike as investors picked up roughly 5,600 puts for $1.55 apiece. Pessimistic trading patterns suggest a bumpy start to the new year for Wells Fargo.

GS – Goldman Sachs Group, Inc. – Bullish activity in the February contract on investment banking firm, Goldman Sachs, suggests shares are poised to pop up in the next few weeks. Shares appreciated slightly during today’s session, rising 0.10% to $169.22 ahead of the closing bell. One optimistic options strategist purchased a debit spread to position for bullish movement in the price of the underlying. The trader bought 10,000 calls at the February $180 strike for a premium of $2.25 apiece, spread against the sale of 10,000 calls at the higher February $185 strike for $1.30 each. The investor shelled out a net $0.95 per contract on the trade. Goldman’s shares must gain approximately 7% from the current price in order for the call-spreader to breakeven at $180.95. Maximum potential profits of $4.05 per contract amass for the trader if GS shares jump 9.3% to $185 by expiration day in February.

EWZ – iShares MSCI Brazil Index ETF – Shares of the EWZ, which corresponds to the performance of publicly traded securities in the Brazilian market, edged 1.75% lower during the trading day to stand at $74.53. Bearish option traders made…
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Bears Bombard Biopharm Firm MannKind, Again

Today’s tickers: MNKD, SKX, FXI, SBUX, VIX, ACOR, NFLX, AMR & UAUA

MNKD – Mannkind Corp. – Stop, hey, what’s that sound? Everybody look what’s going down…We reported bearish options activity on biopharmaceutical company, MannKind Corp., yesterday as investors shed call options and enacted pessimistic plays on the stock. Lo-and-behold, MannKind’s shares plummeted today, falling 20% at times during the trading session to an intraday low of $7.52. News that its inhaled insulin drug, Afresa, could encounter delays at the U.S. Food and Drug Administration incensed investor uncertainty regarding the fate of MNKD’s share price. Option implied volatility jumped 43.61% during the trading day from an intraday low of 116.96% up to the current reading of 167.97%. Frenzied bearish option traders populating the stock today are probably kicking themselves for not acting 24 hour earlier. One investor initiated a put spread today by purchasing 2,000 puts at the February 7.5 strike for an average premium of 1.79 apiece, spread against the sale of 2,000 puts at the lower February 5.0 strike for 64 cents premium each. The net cost of the transaction amounts to 1.15 per contract. Call selling is apparent at the February 10 strike where 1,300 calls sold for 1.21 each. Investors shed 1,200 calls at the higher February 12.5 strike to take in 73 cents premium per contract. Finally, a bearish risk reversal graced the May 2010 contract. It looks like one trader sold 1,250 calls at the May 10 strike for 2.15 apiece in order to partially finance the purchase of the same number of put options at the May 7.5 strike for 3.30 each. The net cost of the put options amounts to 1.15 per contract and yields profits to the downside beneath the breakeven point at $6.35. MNKD’s shares must fall at least 15.5% from today’s low of $7.52 before the investor responsible for the reversal play breaks even on the trade.

SKX – Sketchers USA, Inc. – Fashion footwear manufacturer, Sketchers, received a vote of confidence by one option trader today who initiated a bullish risk reversal in the February contract. The investor implemented the optimistic strategy despite the 0.5% decline in SKX shares to $28.60. It looks like the trader sold 1,800 in-the-money puts at the February 30 strike for 3.00 apiece in order to finance the purchase of 1,800 out-of-the-money calls at the same strike for 2.00 each. The investor receives…
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Bears Continue to Prowl Homebuilding Shares

Today’s tickers: XHB, XLB, APWR, FXI, S, EEM, XLU, UAUA & ACOR

XHB– Shares of the homebuilders fund have dropped 4% today to stand at $11.65. We observed one near-term bear pawing at put options on the ETF in the June and July contracts. The trader took profits on one chunk of put options by selling to close out a long position. It appears that he originally purchased 10,000 puts at the June 12 strike price for an average premium of 20 cents apiece. Today he sold the same 10,000 put options which are currently in-the-money for 40 cents per contract. The investor makes a nice 20 cent per contract gain on the trade, which he may have applied toward the purchase of 10,000 puts at the more bearish July 11 strike price at a cost of 45 cents apiece. The underlying shares of XHB would need to fall another 9% through the breakeven point at $10.55 in order for the trader to amass profits on the new long put position. – SPDR Homebuilders ETF

XLB – The Materials ETF has experienced a share price decline of approximately 3.5% to $27.01. The XLB ticker symbol jumped onto our ‘most active by options volume’ market scanner after a massive chunk of 50,000 calls were traded in the near-term June contract. The 50,000 calls traded to the middle of the market at the June 28 strike price for a premium of 15 cents apiece. We noted the presence of some 59,000 lots of open interest at the June 28 strike price. Upon further investigation, it appears that back on May 20, 2009, 50,000 calls were purchased for 90 cents per contract. If today’s trade represents the closing sale of the same 50,000 calls by the same investor, he has realized a net loss of 75 cents per contract or $3,750,000 in total. – Materials Select Sector SPDR

APWR – The Chinese power generation systems manufacturer appeared on our ‘hot by options volume’ market scanner amid a more than 4% decrease in its share price to $12.35. One investor hoping to benefit from limited bearish movement in the stock populated the September contract today. It appears that the trader sold a strangle in order to fund the purchase of in-the-money put options. The strangle was established through the sale of 3,000 puts at the September 10 strike price for 1.26 apiece
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Phil's Favorites

How Hong Kong's protests are affecting its economy

 

How Hong Kong's protests are affecting its economy

The Hong Kong protests have drawn massive and diverse crowds. AP Photo/Kin Cheung

Courtesy of Allen Morrison, Arizona State University

After nearly three months of unrest, the demonstrations in Hong Kong show no signs of slowing dow...



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Kimble Charting Solutions

Is the US Dollar About To Break Out Higher?

Courtesy of Chris Kimble

The US Dollar Index is flexing its muscle of late.

Trade wars and fear of a global slowdown have capital fleeing to King Dollar.

King dollar breakout test in play?

Looking at today’s chart, you can see that the Dollar has been consolidating in a range for the past year – see shaded area on chart (1).

Now King Dollar is attempting to break out over the topside of that range at (2). That area represents dual resistance, as it also represents the 61.8 Fibonacci retracement level.

What it does here could highly impact the financial ...



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Zero Hedge

South Korea Scraps Intelligence Pact With Japan Amid Rising Trade Tensions

Courtesy of ZeroHedge View original post here.

Most Americans could be forgiven for thinking that the 'trade war' is really only impacting the US and (maybe) China. After all, it was President Trump's belligerent rhetoric about holding China accountable that helped him win in 2016 in the first place. But what is less known, is that Trump's angry trade rhetoric aggravated a bunch of other longstanding trade spats, most notably, the now-emergent trade spat between Japan and South Korea, which is threatening to seriously disrupt trade throughout the Pacific Rim region.

...



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The Technical Traders

Do Good Traders Make Good Gamblers?

Courtesy of Technical Traders

Without breaking the rules, have you ever made a trade that was guaranteed to make you money? A trade that was literally guaranteed to succeed.

If you’re struggling to come up with an answer, we’ll give you a helping hand, the word you’re searching for is likely no. Every financial trade ever made – no matter how sound and well researched using technical analysis – carries with it an element of risk.

Outside factors beyond your control always have the possibility of turning profits into losses and ecstasy into agony. In many ways, trading is similar to gambling. For instance, you may think you know ...



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Insider Scoop

Earnings Scheduled For August 22, 2019

Courtesy of Benzinga

Companies Reporting Before The Bell
  • Hormel Foods Corporation (NYSE: HRL) is estimated to report quarterly earnings at $0.36 per share on revenue of $2.29 billion.
  • BJ's Wholesale Club Holdings, Inc. (NYSE: BJ) is projected to report quarterly earnings at $0.37 per share on revenue of $3.38 billion.
  • DICK'S Sporting Good...


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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

Everything awesome? Gold over $1500. Central banks are printing money to generate fake demand. Germany issues first ever 30 year bond with negative interest rate. Crazy times!

Even Australia and New Zealand and considering negative interest rates and printing money, you know a bunch of lowly populated islands in the South Pacific with no aircraft carriers or nuclear weapons. They will need to do this to suppress their currency as they are export nations, as they need foreign currency to pay for foreign loans. But what is next, maybe Fiji will start printing their dollar. 

Now for a laugh, this Jason Pollock sold for more than $32M in 2012. 





Ok, now call Dan...

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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a ...



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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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