Posts Tagged ‘AUY’

Options Investors Flock to Sallie Mae

Today’s tickers: SLM, LYB, SRZ & AUY

SLM - SLM Corp. – A barrage of bullish options traders targeted the student loan provider today perhaps on news SLM Corp. will continue to downsize and increase the number of company-wide layoffs to 2,500 by the end of next year. Shares in Sallie Mae rallied as much as 3.4% today to touch an intraday high of $12.28, with shares currently trading 2.35% high on the day at $12.16 just before 12:30 pm. Plain-vanilla call buyers expecting bullish movement in the price of the underlying shares to continue picked up 1,500 in-the-money calls at the December $12 strike for an average premium of $0.36 each. Call buying spread to the higher December $13 strike where more than 4,700 call options were purchased for an average premium of $0.14 a-pop. Investors holding the December $13 strike contracts are prepared to make money should SLM Corp.’s shares surge 8.05% over the current price of $12.16 to exceed the average breakeven point at $13.14 by expiration day this month. Bulls also targeted longer-dated put and call options to gain upside exposure on the stock. It looks like one strategist sold 10,000 puts at the January 2011 $11 strike for a premium of $0.22 each, in order to purchase the same number of April 2011 $15 strike calls at a premium of $0.22 apiece. The investor responsible for the transaction seems to be predicting a sharp recovery in SLM Corp. shares by April of next year. Shares in Sallie Mae would need to rally at least 23.35% for the trader to start to make money above the effective breakeven share price of $15.00. The sale of January 2011 $11 strike puts indicates the investor expects shares will exceed that price level through expiration day. But, also suggests the trader is willing to have 1,000,000 shares of the underlying stock put to him at $11.00 apiece should the puts land in-the-money ahead of January expiration. The sharp rise in demand for…
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Qualcomm Strangle Suggests Range-Bound Shares Until October Expiration

Today’s tickers: QCOM, ETFC, CAL, SLB, AUY, EEM, ADSK, NFLX & JNPR

QCOM – Qualcomm, Inc. – Options activity on the digital wireless communications products and services firm indicates shares of the underlying stock could remain range-bound through October expiration. Qualcomm’s shares are down more than 2% to $37.72 with approximately one hour remaining in the trading session. Analysts at Credit Suisse maintain a ‘neutral’ rating on the stock, but slashed its target share price for QCOM to $40.00 from $45.00 and lowered its earnings guidance for 2010 and 2011. According to one options investor, Qualcomm’s shares are likely to trade within a certain range for the next eight months. The trader acted on the range-bound prediction by selling a strangle. The investor sold 10,000 puts at the October $35 strike for a premium of $2.30 each and shed 10,000 calls at the higher October $44 strike for a premium of $1.30 apiece. Gross premium pocketed by the strangler amounts to $3.60 per contract. The trader keeps the full amount of premium only if Qualcomm’s shares trade above $35.00 and below $44.00 through expiration. The premium received acts as a limited buffer against losses should shares swing above or below the strike prices described above. However, losses accumulate for the investor if shares rally above the upper breakeven price of $47.60, or if the stock falls below the lower breakeven point at $31.40 ahead of expiration day in October. Qualcomm’s share price exceeded the upper breakeven point as recently as January 21, 2010, when the stock traded as high as $49.00. Finally, shares have not traded lower than $31.40 – the lower breakeven price on the strangle – since December 5, 2008, when the stock dipped down to $29.33.

ETFC – E*Trade Financial Corp. – Shares of the financial services firm are down 0.65% to $1.54 in late afternoon trading, but options activity on the stock was initiated by bullish investors positioning for a rebound in share price. One optimistic individual established a ratio call spread in the October contract. The trader bought 5,000 call options at the October $2.0 strike for a premium of $0.18 each and sold 10,000 calls at the higher October $3.0 strike for about $0.04 apiece. The investor paid a net premium of $0.10 per contract for the transaction, but stands ready to accrue maximum potential profits of $0.90 per contract if E*Trade’s share price…
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Potash Attracts Option Plays as Shares Increase

Today’s tickers: POT, EWZ, USO, C, NTRI, GFI, AUY, AA, & WYE

POT - Shares of the Canadian producer of potash rallied more than 5% during the trading session to break through the $90.00-level. The stock tempered this afternoon, however, and stands just 2.5% higher for the day at $87.89. We observed interesting bullish plays take place in the December contract. One investor established a 2,000-lot buy-write strategy, also known as a covered call. The covered call involved the purchase of shares of the underlying stock for approximately $90.74, and the simultaneous sale of 2,000 call options at the December 110 strike for a premium of 1.80 per contract. The cost of buying the stock is reduced by the value of the premium received on the sale of the calls, resulting in an effective price per share of $88.94. Additionally, the short call position serves as an exit strategy for the trader if shares of POT trade above $110.00 by expiration. If the December 110 strike calls land in-the-money, the investor will likely have the underlying shares called from him, and he will be left with net profits of 24% on the rally in the stock. The other strategy employed by POT-lovers this afternoon was a call spread. Investors purchased 5,000 calls at the December 115 strike for 1.25 each, and sold 5,000 calls at the higher December 120 strike for 85 cents premium apiece. – Potash Corp. of Saskatchewan, Inc. –

EWZ - Shares of the Brazil exchange-traded fund are slightly higher this afternoon by less than 0.5% to stand at $69.58. Option traders expecting continued bullish movement in the price of the fund initiated optimistic plays across several contracts. One nearer-term indication of bullish sentiment is a call spread in the November contract. The trade likely involves the purchase of 2,000 calls at the November 71 strike for a premium of 3.23 apiece, spread against the sale of 2,000 calls at the higher November 77 strike for one dollar each. The net cost of the transaction amounts to 2.23 per contract. Thus, maximum potential profits of 3.77 are available in the event that shares of the EWZ rally 11% to $77.00 by expiration next month. Plain-vanilla call buying is another tactic employed by bullish investors today. Some 2,500 calls were purchased at the March 2010 80 strike for a premium of 2.70 each. Finally, 1,000 calls were coveted by…
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Sara Lee Tempts Call Buyers

Today’s tickers: SLE, TPX, ODP, AUY & BAC

SLE - Cake baker, Sara Lee, attracted bullish investors to the January contract this morning amid a 3% rally in the price of shares to $10.40. Traders thirsting for a rally in SLE by the start of 2010 purchased more than 8,000 calls at the January 12.5 strike for an average premium of 21 cents apiece. Investors holding the calls are now positioned to accumulate profits if shares of Sara Lee surge 22% higher to breach the breakeven price of $12.71 by expiration. We note that SLE has not traded higher than $12.71 since October 6, 2008. – Sara Lee Corp. –

TPX - The manufacturer of luxurious mattresses experienced a 1% decline in shares to $18.04 today despite having received an upgrade to ‘outperform’ from ‘neutral’ and a 12-month price target of $23.00 at Wedbush Morgan Securities. Investors employed two different strategies using options in the October contract. One tactic observed was a bullish risk reversal. The trader shed 1,000 puts at the October 17.5 strike for an average premium of 97 cents in order to partially finance the purchase of 1,000 in-the-money calls at the same strike for 1.85 apiece. The net cost of the reversal amounts to 88 cents per contract. The bullish trader stands ready to breakeven on the transaction if shares can breach the breakeven point at $18.38 by expiration next month. Another investor targeted the same strike to implement a short straddle. This individual sold 2,000 puts for 75 cents each and 2,000 calls for 1.80 per contract at the October 17.5 strike to pocket a gross premium of 2.55. The short straddle indicates that the trader expects shares of TPX to settle at $17.50 by October expiration. If the stock moves 54 cents lower to $17.50, the investor will keep the entire 2.55 premium received on the sale. Otherwise, greater volatility in the price of TPX could result in losses if shares shift outside of the breakeven point to the upside at $20.05, or beneath the breakeven to the downside at $14.95. – Tempur-Pedic International, Inc. –

ODP - Shares of the global supplier of office products slumped 8% lower at the start of the session to $5.86. The stock recovered somewhat by 11:30 am (EDT) with shares down 4% to $6.12. Some investors braced for continued declines in ODP by initiating put spreads in the October…
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Zero Hedge

Prins: "We're Living In A Permanent Distortion"

Courtesy of ZeroHedge View original post here.

Via Greg Hunter’s USAWatchdog.com,

Three time best-selling book author Nomi Prins says long before the Covid 19 crisis, the global economy was faltering big time.  The Fed stepped in with the start of massive money printing in late 2019 to save the day. 

Prins explains, “We were already in crisis mode as I mentioned at the end of my last book going into 2019."

&q...



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Phil's Favorites

Ethical challenges loom over decisions to resume in-person college classes

I don't see how universities can be safely reopened. Classes may have to shift to largely or only online. Dorms, if they reopen, would probably need to limit rooms to one person, and maybe only for students without other options. This would obviously be a financial disaster for many colleges and millions of people. The federal government would ideally step in to help universities and employees survive financially. Any thoughts?

Ethical challenges loom over decisions to resume in-person college classes

It’s hard to social distance on campus. AP Photo/Rick Bowmer

Courtesy of Neta C. Crawford, ...



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Biotech/COVID-19

Ethical challenges loom over decisions to resume in-person college classes

I don't see how universities can be safely reopened. Classes may have to shift to largely or only online. Dorms, if they reopen, would probably need to limit rooms to one person, and maybe only for students without other options. This would obviously be a financial disaster for many colleges and millions of people. The federal government would ideally step in to help universities and employees survive financially. Any thoughts?

Ethical challenges loom over decisions to resume in-person college classes

It’s hard to social distance on campus. AP Photo/Rick Bowmer

Courtesy of Neta C. Crawford, ...



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ValueWalk

Facebook Stock Crashes Due To Ad Boycott - Key Investing Points

By Sven Carlin. Originally published at ValueWalk.

Facebook, Inc. (NASDAQ:FB) stock crashed 8.32% on Friday because of the announced ad boycott by many companies like Unilever, Coca Cola, recently Starbucks on Sunday that might push the stock down even more during this week.

Q2 2020 hedge fund letters, conferences and more

However, investing is about knowing how to differentiate between the noise and fundamentals and we discuss Facebook's recent news and compare it to FB fundamentals.

  • Facebook stock crash
  • Ad boycott
  • Facebook stock volatility
  • Facebook's fundamentals
  • Be sure of volatility
  • My po...


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Chart School

Golds quick price move increases the odds of a correction

Courtesy of Read the Ticker

Every market corrects, maybe profit taking, maybe of allowing those who missed out, to get in!


The current open interest on the gold contract looks to high after a very fast price move, it looks like 2008 may be repeating. A quick flushing out of the weak hands open interest may take place before a real advance in price takes place. The correction may be on the back of a wider sell off of risk assets (either before of after US elections) as all assets suffer contagion selling (just like 2008).

This blog view is a gold price correction of 10% to 20% range is a buying opportunity. Of course we may see  a very minor price correction but a long time correction, a price or time is correction is expected, we shall watch and...

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The Technical Traders

Wild Volatility Continues As US Markets Attempt To Establish New Trend

Courtesy of Technical Traders

We’ve continued to attempt to warn investors of the risks ahead for the US and global markets by generating these research posts and by providing very clear data supporting our conclusions.  Throughout the entire months of May and June, we’ve seen various economic data points report very mixed results – and in some cases, surprise numbers as a result of the deep economic collapse related to the COVID-19 virus event.  This research post should help to clear things up going forward for most traders/investors.

As technical traders, we attempt to digest these economic data factors into technical and price analysis while determining where and what ...



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Kimble Charting Solutions

Nasdaq 100 Relative Strength Testing 2000 Highs

Courtesy of Chris Kimble

The tech bubble didn’t end well. BUT it did tell us that the world was shifting into the technology age…

Since the Nasdaq 100 bottomed in 2002, the broader markets have turned over leadership to the technology sector.

This can be seen in today’s chart, highlighting the ratio of Nasdaq 100 to S&P 500 performance (on a “monthly” basis).

As you can see, the bars are in a rising bullish channel and have turned sharply higher since the 2018 stock market lows. This highlights the strength of the Nasdaq 100 and large-cap tech stocks.

...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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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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Promotions

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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