Posts Tagged ‘AEM’

Bears Mine For Put Options On Agnico-Eagle As Shares Nosedive

Today’s tickers: AEM, ANF, LEN & ALTR

AEM - Agnico-Eagle Mines Ltd. – News that Agnico-Eagle Mines indefinitely suspended operations at its Goldex mine in Quebec took the luster out of shares in the gold mining company today. The stock fell nearly 20.0% to a multi-year low of $45.78 at its lowest point of the session. Some options traders are positioning for the stock to look even more tarnished by the end of the week. Meanwhile, demand for longer-dated put options on Agnico-Eagle Mines suggests the shares may remain under pressure through AEM’s third-quarter earnings release next Wednesday, for the remainder of 2011, and into the New Year.

Near-term bears jockeyed for put options in the October contract. The Oct. $45 and $47.5 strikes are two of the most active, with the majority of positions in each largely initiated by buyers. Traders exchanged roughly 1,400 in-the-money puts at the Oct. $47.5 strike against open interest of 317 contracts. These contracts were purchased roughly 930 times for an average premium of $0.89 a-pop. Investors long the puts may profit if shares in AEM trade below the average breakeven price of $46.61 at expiration later this week. The Oct. $45 strike put is the most active in the front month, with more than 2,100 of the contracts in play against open interest of 578 lots. Investors purchased most of the put options for an average premium of $0.55 each, and may make money on the bearish position in the event that shares in the gold mining company slip beneath the average breakeven point at $44.45 by expiration day.

Buyers of November contract put options at the $40, $35 and $32.5 strikes may see the value of their deep out-of-the-money options rally should the company’s third-quarter earnings or forward guidance disappoint. Finally, longer-term pessimism cropped up in the Jan. 2012 $45 strike put where some 1,700 contracts were purchased for an average premium of $3.78 apiece. The investor or investors holding the put options may profit at expiration next year if shares in AEM slide 10.0% off today’s low of $45.78 to breach the average breakeven point on the downside at $41.22. Shares in Agnico-Eagle Mines last traded below $41.22 back in December 2008. The overall reading of options implied volatility on the stock popped up 26.7% to 57.2% in the first half of the session.

ANF - Abercrombie & Fitch Co. – Sizable prints in Abercrombie…
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Optimism Detected In Plum Creek Timber Options Despite Earnings Miss

Today’s tickers: PCL, XLE, TIN & AEM

PCL - Plum Creek Timber Co., Inc. – Seattle, WA-based Plum Creek Timber Co. posted lower-than-anticipated second-quarter net income of $0.27 a share after the close on Monday, missing average the average analyst forecast of $0.29 a share to send the price of the underlying down as much as 4.2% today to $38.75. Put options on Plum Creek are active post-earnings, but it looks like much of the volume was generated by investors taking long-term bullish views on the stock. Trading traffic in PCL options is heaviest at the Jan. 2012 $38 strike where more than 2,700 puts changed hands against previously existing open interest of just 65 contracts. The majority of the puts exchanged at that strike appear to have been sold at an average premium of $2.32 per contract. Put sellers keep the full amount of premium received on the transaction as long as shares in Plum Creek Timber exceed $38.00 through expiration day in January. Traders short the puts have time erosion working in their favor, and may also benefit from subsiding levels of options implied volatility on the stock. Investors likely expect shares to resist above $38.00 over the next six months, but stand ready to take delivery of the stock at an effective price of $35.68 a share, on average, should the puts land in-the-money at expiration next year.

XLE - Energy Select Sector SPDR Fund – Massive prints in September contract call options covering the Energy SPDR appear to be the work of an investor adjusting a previously established bullish position on the sector. Shares in the XLE, an exchange-traded fund that tracks the performance of the Energy Select Sector of the S&P 500 Index, turned positive this afternoon to trade 0.10% higher on the day at $79.50…
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Bulls Prep for Continued Run-Up in Sprint

 

Today’s tickers: S, SMH, AEM & XRT

S - Sprint Nextel Corp. – Shares in the third-largest U.S. mobile provider hit a new 2-year high today, rising as much as 5.9% earlier in the session to $5.90. The communications company’s share price took a big hit after AT&T and T-Mobile announced plans to merge back in March, but the stock has sky-rocketed in the two months since then, gaining 41.5% off its post-deal announcement low of $4.17. Perhaps shares were helped higher on news Leap Wireless International joined “team Sprint” in opposing the $39 billion acquisition of T-Mobile by AT&T. Shares in Sprint Nextel Corp. may also be higher ahead of the Thursday release of Google’s mobile-payment service, which will operate on Sprint’s phones. Investors positioning for the uptrend to continue over the long term initiated bullish plays in the November contract. It looks like traders are employing ratio call spreads, buying roughly 2,500 calls at the November $7.0 strike for an average premium of $0.31 each, and selling around 5,000 calls up at the higher November $8.0 strike at an average premium of $0.14 apiece. Net premium required on average to establish the trade amounts to just $0.03 per contract. Ratio call spreaders stand prepared to make money in the event that Sprint’s shares surge 19.2% over today’s high of $5.90 to surpass the average breakeven price of $7.03 by expiration day in November. Maximum potential profits of $0.97 per contract are available on the transaction should the price of the underlying stock jump 35.6% to settle at $8.00 at expiration. Sprint Nextel Corp. shares last traded above $7.03 back in September 2008. The sale of twice as many of the higher-strike calls substantially lowered the price at which call spreaders break even, but also ups the amount of risk undertaken on the position. The uncovered short calls may result in losses in the event that shares spike above the upper breakeven price of $8.97 at expiration in November. Options implied volatility…
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Contrarians Position for Medifast to Trim Losses

Today’s tickers: MED, AMD, NSM & AEM

MED - Medifast, Inc. – Shares in the maker of weight management products shed 12.0% this morning to touch down at an intra-session low of $22.19 following disappointing earnings from competitor NutriSystem, Inc. NTRI’s shares dropped 31.2% today to a fresh 52-week low of $13.90 post-earnings. Medifast’s earnings are just around the corner, with the report scheduled for release ahead of the opening bell on March 3, 2011. Despite the gloomy forecast out of NutriSystem, it looks like one investor is positioning for a more positive outcome from Medifast. The contrarian player appears to have purchased a debit call spread, buying 1,000 calls at the April $23 strike for an average premium of $2.19 each, and selling the same number of calls at an average premium of $0.99 apiece. The net cost of the bullish play amounts to $1.20 per contract and positions the trader to make money should MED’s shares bounce back up by around 9.0% to surpass the average breakeven point at $23.20 ahead of April expiration. Maximum potential profits of $1.80 per contract are available to the call-spreader if shares in Medifast rally 17.2% off today’s low of $22.19 to trade above $26.00 before the calls expire in April. The rise in demand for MED options helped lift options implied volatility on the stock 12.0% to 80.16% in early afternoon trade.

AMD - Advanced Micro Devices – A sizeable stock and options combination play on Advanced Micro Devices caught our eye this morning. It looks like one strategist initiated a delta neutral position on AMD in the July contract. Shares in the name are up 3.3% to arrive at $9.40 as of 12:50pm. The investor appears to have sold 319,000 shares of the underlying at a price of $9.34 each, and…
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Option Player Reenergizes Bullish Stance on RRI Energy, Inc.

Today’s tickers: RRI, USO, GLD, MT, AEM, INTC, ESRX, C, KO & GEOY

RRI – RRI Energy, Inc. – A large-volume call option combination play launched RRI Energy onto our ‘most active by options volume’ market scanner this afternoon. The investor responsible for the activity banked profits by selling-to-close a previously established long call position. The trader also initiated a new bullish stance on the stock to position for a near-term rebound in shares of the underlying. RRI’s shares are down more than 2.5% today to $5.58. It appears the investor originally purchased 35,000 calls at the now deep in-the-money December 4.0 strike for a premium of 1.30 apiece in early November when shares were at $5.15. Today the trader sold the chunk of call options for 1.55 each, banking net profits of 15 cents per contract. Finally, the RRI-optimist established a fresh bullish stance at the in-the-money January 5.0 strike by buying 35,000 calls for a premium of 85 cents apiece. Shares must rally about 5% from today’s price in order for the investor to break even at $5.85 by expiration next month. The increase in demand for option contracts on the stock lifted option implied volatility significantly. Volatility on RRI Energy increased 21.66% from an intraday low of 55.31% to a high of 67.29%.

USO – United States Oil Fund LP – Shares of the USO fund slipped slightly lower during the trading session, falling less than 1% to $36.50, as of 3:00 pm (EDT). Short strangle plays in the July contract suggest shares of the fund are likely to remain range-bound for the next seven months to expiration. Investors shed 2,500 calls at the July 38 strike for a premium of 3.56 apiece, in conjunction with the sale of the same number of puts at the lower July 33 strike for a premium of 2.75 each. Short-stranglers receive a gross premium of 6.31 per contract on the trade. They keep the full amount of premium if USO’s shares trade within the strike prices described through expiration. Shares of the fund traded within the range of $33-$38 for the four month period starting July 15, 2009, and ending October 12, 2009. Perhaps today’s short strangle sellers expect to see similar inertia in USO shares for the next seven months to expiration.

GLD – SPDR Gold Trust ETF – A bullish risk reversal on the gold exchange-traded fund suggests…
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Phil's Favorites

Jamal Khashoggi: Casualty of the Trump administration's disregard for democracy and civil rights in the Middle East?

  Jamal Khashoggi: Casualty of the Trump administration’s disregard for democracy and civil rights in the Middle East?

Courtesy of David Mednicoff, University of Massachusetts Amherst

The international crisis over whether top Saudi Arabian leadership murdered U.S.-based Saudi journalist Jamal Khashoggi is a striking example of the consequences of Donald Trump’s blanket disregard for democratic politics and human rights in other countries. This departure from decades of American foreign policy rhetoric remains comparatively undiscussed.

However, in the Middle East, my area of e...



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Zero Hedge

Kolanovic: Systematic Flows Explained Market Moves This Week - Here's What They Will Do Today

Courtesy of ZeroHedge. View original post here.

Last Friday morning, just as markets were set for a powerful bounce after the biggest two-day drop since February, JPM's head quant Marko Kolanovic predicted that the recent selling pressure, which had come from option gamma hedging, was ending and noted that since "equity indices already experienced comparable declines to February (and e.g. Russell 2000 even a bigger drawdown), we think that the cur...



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Kimble Charting Solutions

This commodity is breaking above resistance and moving averages, says Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

At the beginning of the month, the Power of the Pattern shared that Coffee was testing long-term support, as it was at the apex of a bullish falling wedge, with momentum deeply oversold and commercial hedgers were betting big time it would rally. See Post Here

In the past when this setup was in play, Coffee rallied more than 50% in a short time period at each (1). Since that post, Coffee has been one of the best-performing commodities on the plan...



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Digital Currencies

Blockchains won't fix internet voting security - and could make it worse

 

Blockchains won't fix internet voting security – and could make it worse

An e-ballot is less secure than one on paper. SvetaZi/Shutterstock.com

Courtesy of Ari Juels, Cornell University; Ittay Eyal, Technion - Israel Institute of Technology, and Oded Naor, ...



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Insider Scoop

10 Stocks To Watch For October 18, 2018

Courtesy of Benzinga.

Some of the stocks that may grab investor focus today are:

  • Wall Street expects Philip Morris International Inc. (NYSE: PM) to report quarterly earnings at $1.27 per share on revenue of $7.15 billion before the opening bell. Philip Morris shares fell 0.07 percent to $84.50 in after-hours trading.
  • Analysts expect PayPal Holdings, Inc. (NASDAQ: ...


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Chart School

Weekly Market Recap Oct 14, 2018

Courtesy of Blain.

Wednesday and Thursday finally brought some fireworks to a very complacent market.   The S&P 500 had not had a 1% move in 74 days until Wednesday’s drawdown.

Rising yields were nailed as the culprit but months of rallying eventually require some sort of shake out – whatever the catalyst.  Wednesday’s sell off was the worst day for the S&P 500 since February and the worst for the NASDAQ since June 2016.

The market losses are “a reaction from investors finally realizing we are in a higher interest-rate environment, and given the elevated level of stocks, market participants were likely looking for a reason to sell,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Higher interest rates typically bring on tighter ...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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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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All About Trends

Mid-Day Update

Reminder: Harlan 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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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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