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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Phil's Favorites

What China wants: 3 things motivating China's position in trade negotiations with the US

 

What China wants: 3 things motivating China's position in trade negotiations with the US

Courtesy of Penelope B. Prime, Georgia State University

Relations between the U.S. and China have deteriorated sharply in recent days after trade negotiations broke down, leading some to suggest we are on the cusp of a new “cold war.”

President Donald Trump blames the resumption of hostilities on China. Specifically, he and his negotiators say their Chinese counterparts backtracked on an agreement to change laws aimed at enforcing the ...



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Zero Hedge

White House Planned To Use Huawei As Trade 'Bargaining Chip'

Courtesy of ZeroHedge

If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining chip' during trade talks with the Chinese, Bloomberg just put the issue to rest.

In a report sourced to administration insiders, BBG reported that the Trump administration waited to blacklist Huawei until talks with the Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the talks.

...



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Kimble Charting Solutions

Commodities; Long-Term Bottom Being Created This Month?

Courtesy of Chris Kimble.

Is the Thomson Reuters Equal Weight Commodities creating a long-term bottom? What the index does at (3) over the next few weeks, will go a long way to answering this important question!

Commodities don’t have much to brag about over the past 8-years, as lower highs have taken place since the peak back in 2011. After the peak in 2011, they have created falling channel (1).

The index hit the top of this channel the prior two months at (2), creating back to back bearish reversal patterns.

Softness this month has the index testing 2017 lows and rising support at (3). While ...



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Insider Scoop

Off-Roaders Are In Buying Mood, BMO Says In Polaris Upgrade

Courtesy of Benzinga.

A long winter and the worst of the U.S.-China trade war may both be in the rearview mirror for off-road vehicle maker Polaris Industries Inc. (NYSE: PII), BMO Capital Markets said Tuesday.

The Analyst

Gerrick Johnson upgraded Polaris from Mark...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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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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