Posts Tagged ‘AN’

Market bullish, options bearish

Today’s tickers: XLI, XLY, DELL, CAT, XLF, AET, AN, EWT, SLAB, QLGC, BYD & INTC

XLI Industrial Select Sector SPDR – The industrials ETF attracted massive amounts of downside protection by investors fearing a near-term contraction in shares of the fund. The price per share is currently up by 3% to $23.19 on the day following broader market gains experienced today. However, traders have enacted a decidedly bearish position on the fund in the near-term May contract. At the May 19 strike price more than 65,100 puts were purchased for an average premium of 17 cents apiece. These option contracts will begin to yield profits to the downside beginning at the breakeven share price of $18.83. Further along, the in-the-money June 23 strike price saw traders who were likely banking gains on the rise in shares today by selling approximately 27,000 calls for an average premium of 65 cents per contract.

XLY Consumer Discretionary Select Sector SPDR – The consumer discretionary ETF jumped onto our ‘most active by options volume’ market scanner after investors bought a huge chunk of puts in the near-term May contract. Shares have rallied by 4% to $21.80 today, creating lesser cost premiums on put options. At the May 20 strike price approximately 58,100 puts were picked up for an average premium of 18 cents apiece. Investors have certainly appeared to brace themselves for bearish movements in the fund. Fleshing out the pessimistic picture was the sale of 2,290 calls at the May 23 strike for 82 cents which indicates that traders do not see today’s rally stemming too much further, particularly in the near-term.

DELL Dell Inc. – The just-in-time manufacturer of personal computers has rallied by more than 4% to $11.35 amid broad market gains today. We observed one trader who appears to have established a covered call in the January 2010 contract. It is likely that this investor bought shares of the underlying stock today or was already long the stock previously, and then sold 24,500 calls at the January 12.5 strike price for a premium of 1.50 each. The trader pockets the 1.50 premium and has locked into gains of 10% on the rise in share price should the calls land in-the-money and the underlying stock get called from him at expiration next year.

CAT Caterpillar, Inc. – Shares of CAT have rallied by more than 3.5% today to arrive at…
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Semiconductor credit spread indicates bearish view

Today’s tickers: SMH, ELAN, FDX, DELL, AN, GE, POT, PCLN & ERIC

SMH Semiconductor HOLDRS Trust – The semiconductors ETF has seen shares decline by more than 3.5% to stand at $18.11 today. We noticed one investor who is looking to profit from a near-term pull back in shares, by establishing a credit spread in the April contract. While the open interest at the April 18 strike suggests that there has been bullish activity there recently, we believe the trader we observed today is taking the opposite stance. At the April 20 strike price 25,000 calls were purchased at 46 cents apiece, while at the April 18 strike 25,000 in-the-money calls were sold for 1.36 each. The net credit achieved with this strategy amounts to 90 cents and is safe in the bank if shares remain below $18 by expiration next month. SMH has not traded above $20 since November of 2008, and the stock has reached a line of resistance at around $18. This investor may turn out to have made a wise choice in taking advantage of the richer premium afforded by the in-the-money contracts at the lower strike, and he will look for both the April 18/20 calls to expire worthless in 30 days in order to pocket the 90 cent premium. This bear was not alone in the woods today, as the May contract saw 14,000 puts purchased at the 14 strike price for 24 cents apiece. Super-pessimists are looking for shares to decline below the 52-week low on the stock at $14.51 because profits begin to amass as shares fall beginning at the breakeven share price of $13.76.

ELN Elan Corporation PLC – The neuroscience-based biotechnology company has experienced a share price decline of 2% to $5.29. ELN appeared on our ‘hot by options volume’ market scanner after one investor traded a large number of calls in the January 2010 contract. The trader purchased 28,000 calls for 20 cents each at the January 17.5 strike price. Given that shares are light-years away from nearing $17.50, we investigated the open interest of 29,000 at the 17.5 strike. It looks as though this investor sold a good portion of these 28,000 calls short on January 8, 2009 for a premium which ranged between 70 cents and 1.25 per contract when shares were at $9.00. We noted at the time in our commentary that this was part of…
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AutoNation benefiting from shifts in consumer trend

Today’s tickers: AN, GD, HSY, MSFT & NOK

AN – AutoNation Inc. – Shares of the automotive retailer have lifted 6% today to $10.33, a price that represents a more than 160% increase over the 52-week low of $3.97 established just as the broad market reached its weakest point for 2008 in November. AutoNation continues to thrive in this depressed economic environment, whereas the big four automakers are left struggling in vain to avoid the descent to bankruptcy. AN has captured a sweet spot in the auto industry given that consumers continue to require automobiles for transportation purposes, but are currently without the means to purchase new vehicles. And so AutoNation welcomes cash-strapped consumers to its franchises, while big-auto laments the loss of customers, which it so desperately needs. Interestingly, CEO Mike Jackson, reported that demand for highly fuel-efficient autos and hybrid vehicles has fallen off a cliff given the decline in the price of gasoline, and now AN’s lots are chock-full of the cars. Perhaps if gasoline prices rally and consumers once again remember the long-run cost savings hybrids accrue, the hybrid vehicles will once again fly off the shelves. AN popped onto our ‘hot by options volume’ market scanner today after some interesting trades were established in the March and April contracts. At the March 10 strike price, 10,000 puts were sold for 40 cents each while at that same strike, 5,000 calls appear to have been purchased for 90 cents apiece. It also looks like these two trades were connected to the purchase of 2,500 calls at the April 10 strike price for 1.45 per contract, as well as the purchase of 2,500 calls at the April 12.5 strike for 45 cents each. We believe that the puts were sold as a vehicle to finance the purchase of calls as this investor seeks further upside on AN. The March 10 calls are already in-the-money as of today, but shares would need to rally by an additional 21% in order for the April 12.5 calls to land in-the-money by expiration. The investor appears to feel confident that the shares will remain above $10.00 at expiration.

GD – General Dynamics Corp. – Over the course of the last six months, shares at defense contractor, General Dynamics have fared badly falling from around $95 to $35 per share. You can blame the broad macro environment or you can focus on…
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Phil's Favorites

Dozens of migrants disappear in Mexico as Central American caravan pushes northward

 

Dozens of migrants disappear in Mexico as Central American caravan pushes northward

Migrants travel in groups through Mexico for safety reasons. But Mexico is still one of the world’s most dangerous countries. AP Photo/Rodrigo Abd

Courtesy of Luis Gómez Romero, University of Wollongong

The Hondurans who banded together last month to travel northward to the United States, fleeing gangs, ...



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Kimble Charting Solutions

King Dollar Creating A Topping Pattern This Week?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar has spent the majority of the past 7-years inside of rising channel (1), as it’s created a series of higher lows and higher highs.

The 2018 rally has it kissing the underside of potential resistance this week at (2), where it could be creating a bearish reversal pattern. This one week action has NOT changed the upward trend in King Dollar.

If it breaks rising support at (3), odds favor that some selling pressure takes place in the US$, which metals would lov...



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Zero Hedge

IMF Sounds The Alarm On Leveraged Lending

Courtesy of ZeroHedge. View original post here.

Five months after the IMF sounded the alarm over junk bonds, it has now moved on to the credit market bogeyman du jour and overnight joined others such as the Fed, BIS, Oaktree, JPMorgan, and Guggenheim in "sounding the alarm on leveraged loans."

By Tobias Adrian, ...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Fall, Dow Futures Down 100 Points

Courtesy of Benzinga.

Related SPY A Peek Into The Markets: US Stock Futures Up Ahead Of Economic Reports A Peek Into The Markets: US Stock Futures Edge L...

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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Chart School

Weekly Market Recap Nov 11, 2018

Courtesy of Blain.

This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic.   Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been.   Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!

The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.

“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlik...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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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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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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