Posts Tagged ‘AXL’

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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Bearish Options Player Fashions Put Butterfly Spread on Retail SPDR ETF

Today’s tickers: XRT, TSN, CVS & AXL

XRT - SPDR S&P Retail ETF – A large bearish put butterfly spread on the retail ETF this afternoon suggests one options strategist is positioning for a pullback in the price of the underlying ahead of May expiration. Shares in the XRT, an exchange-traded fund that tracks the performance of the S&P Select Industry Index, are down 0.20% to stand at $51.87 as of 12:30pm in New York. The pessimistic player traded a total of 80,000 put options on the fund, driving most of the volume generated on the XRT thus far in the session. It looks like the trader picked up 20,000 puts at the May $47 strike at a premium of $0.37 each, sold 40,000 puts at the May $49 strike for a premium of $0.67 apiece, and purchased 20,000 May $51 strike puts at a premium of $1.27 a-pop. The net cost of establishing the put ‘fly amounts to $0.30 per contract and positions the retail-bear to make money in the event that shares in the ETF fall another 2.3% from the current price of $51.87, to breach the upper breakeven price of $50.70 by May expiration day. Maximum potential profits of $1.70 per contract are available to the investor should shares in the fund fall 5.5% to settle at $49.00 at expiration. Enacting this strategy significantly reduces the overall cost of taking a bearish stance on the retail sector, as opposed to buying the May $51 strike puts outright or purchasing a debit put spread, for example. Additionally, the put ‘fly requires relatively smaller downside moves in XRT shares before the position to breaks even than the aforementioned strategies.

TSN - Tyson Foods, Inc. – Investors lunched on Tyson call options today with shares in the meat manufacturer rising as…
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Long-Term Bull Eyes Upside Potential at Fidelity National Information Services

 Today’s tickers: FIS, AXL, PGN, HAS, GDX & MYL

FIS - Fidelity National Information Services – A three-legged options combination play on the global provider of banking and payments technology solutions, processing services and information-based services, indicates one strategist is long-term bullish on Fidelity National Information Services. Shares in FIS are currently up 0.20% to stand at $28.55 in the final 20 minutes of the session. The transaction positions the investor to attain maximum possible profits in the position if FIS shares break well above the current 52-week high of $30.78 on the stock. The options player sold 1,105 puts at the January 2012 $22.5 strike for an average premium of $1.03 each in order to offset the cost of buying the same number of January 2012 $30 strike calls at an average premium of $2.23 apiece, marked against the sale of 1,105 calls at the higher January 2012 $32.5 strike for an average premium of $1.05 a-pop. Net premium paid to initiate the three-legged spread amounts to $0.15 per contract. Thus, the options trader stands ready to make money should FIS shares surge 5.6% over the current price of $28.55 to exceed the average breakeven point to the upside at $30.15 ahead of expiration day next January. Maximum potential profits of $2.35 per contract are available to the trader should shares in Fidelity National Information Services jump 13.8% to trade above $32.50 before the contracts expire in 2012.

AXL - American Axle & Manufacturing Holdings, Inc. – Shares of the auto parts manufacturer shot up as much as 9.0% this afternoon to secure an intraday high of $15.25 by 3:40pm in New York trading on unconfirmed takeover chatter. Rumors that Magna International Inc. may place a $23 to $25 cash bid for AXL spurred a rally in the price of the American Axle’s shares and drove speculators to options in the name. Additionally, analysts at JPMorgan Chase & Co. reportedly rated AXL at ‘overweight’ and said shares could move into the upper-teens in the next…
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Put spreader portends near-term erosion in Energy fund’s shares

Today’s tickers: XLE, CROX, COCO, PCX, EBAY, NTAP, MW, ARG & AXL

XLE – Energy Select Sector SPDR ETF – A massive put spread purchased on the XLE, an exchange-traded fund designed to correspond to the performance of the Energy Select Sector of the S&P 500 Index, points perhaps to one investor’s expectation that the price of the fund’s shares are set to decline ahead of September expiration day. Shares of the fund are currently up 0.40% at $54.06 as of 3:45 pm ET. It looks like the pessimistic player picked up approximately 40,000 puts at the September $53 strike for an average premium of $0.21 each, and sold about the same number of puts at the lower September $52 strike at an average premium of $0.44 a-pop. Net premium paid to purchase the spread amounts to $0.23 per contract. The investor responsible for the transaction stands ready to make money if shares of the XLE fall 2.4% from the current price of $54.06 to breach the effective breakeven point at $52.77 by expiration next Friday. Maximum potential profits of $0.77 per contract – for a total of $3,080 million – are available to the trader if the XLE’s shares drop 3.8% to slip beneath $52.00 by expiration day.

CROX – Crocs, Inc. – The footwear firm’s shares plunged 15.5% in afternoon trading to touch down at an intraday low of $11.68. Sharp share price erosion spurred put buying by options traders expecting the stock to continue lower ahead of October expiration. Investors purchased approximately 5,100 now in-the-money puts at the October $12 strike for an average premium of $0.85 each. Put players make money if shares fall another 4.5% from today’s low of $11.68 to breach the average breakeven point at $11.15 by expiration day next month. Options implied volatility on the shoe maker shot up 26.7% to 66.39% as of 3:40 pm ET.

COCO – Corinthian Colleges, Inc. – Shares in for-profit university, Corinthian Colleges, Inc., shot up 14.5% to an intraday high of $5.61 this morning on speculation the company may be acquired. Options traders were quick to initiate bullish stances on the stock in case the rumors end up having some truth to them. COCO’s shares cooled slightly in afternoon trading and are currently up 9.8% on the day to stand at $5.38 as of 2:50 pm ET. Speculators hoping to see shares continue higher picked…
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Emerging Markets Bear With Butterfly Wings Dominates EEM Puts In Afternoon Trading

Today’s tickers: EEM, ETFC, CVA, CSCO, CMCSK, XLI, CATM, AXL & ASML

EEM – iShares MSCI Emerging Markets Index ETF – An enormous bearish put butterfly spread comprised of 240,000 put options cast a gloomy shadow over the emerging markets fund late in afternoon trading. Shares of the EEM, an exchange-traded fund designed to provide investment results that correspond to the price and yield performance of the MSCI Emerging Markets Index – an index created to measure equity market performance in the global emerging markets, are down 0.35% at $37.21 as of 3:30 pm (ET). The massive bearish transaction on the fund suggests one big player is bracing for a potential 19% pullback in the price of the underlying shares by June expiration. The butterfly spread spans the June $25/$30/$35 strikes, with 60,000 puts picked up at the June $25 strike for a premium of $0.11 each [wing 1] and another 60,000 puts purchased at the higher June $35 strike for a premium of $0.88 apiece [wing 2]. The body of the butterfly involved the sale of 120,000 puts at the central June $30 strike for a premium of $0.27 a-pop. The net cost of the spread amounts to $0.45 per contract. The EEM’s shares must slip beneath the upper breakeven price of $34.55 before the investor starts to make money ahead of June expiration. Maximum available profits of $4.55 per contract pad the investor’s wallet if shares of the underlying fund fall 19.35% from the current price to settle at $30.00 at expiration. Shares of the EEM last traded below $34.55 back on August 19, 2009, and touched a 52-week low of $30.12 back on June 23, 2009. The investor responsible for the giant transaction only ever risks losing $0.45 per contract, but stands ready to amass more than 10 times that amount – $4.55 per contract – if shares nose-dive down to $30.00 ahead of expiration day next month.

ETFC – E*Trade Financial Corp. – A massive three-legged options combination play initiated on financial services firm, E*Trade Financial Corp., suggests one investor sees shares of the provider of online brokerage services trading within a narrow range through expiration in January 2011. ETFC shares are up 2.05% at $1.49 as of 2:30 pm (ET). The big options player initiated a sold strangle, selling 30,000 calls at the January 2011 $2.0 strike for $0.21 apiece and shedding 30,000 puts at…
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Commodity Reversal Sees Bulls Charging in Potash

Today’s tickers: POT, LVS, WYE, TGT, WMT, HGSI, AXL, SBUX & GDX

POT – Shares of the fertilizer and feed products company have rallied 2.5% during the trading session to arrive at the current price of $96.06. Bullish investors rushed in to establish optimistic positions on the stock. A bullish reversal play was established in the near-term September contract by a trader anticipating significant gains by expiration. The reversal involved the sale of 10,000 puts at the September 80 strike price for 75 cents each, which were employed to finance the purchase of 10,000 calls at the higher September 105 strike for 1.80 apiece. The net cost of the trade amounts to 1.05 per contract. The investor responsible for the transaction will begin to amass profits if shares of POT surge approximately 10% through the breakeven price of $106.05 by expiration. Bullish sentiment spread to the December contract where it appears that another trader shed puts to finance the purchase of bull call spread. The December 90 strike had about 2,000 puts shed for 7.90 apiece. Premium received on the sale was put toward the purchase of 2,000 calls at the December 100 strike for 9.25 each, which was offset by the sale of 2,000 calls at the higher December 130 strike for 2.15 per contract. The investor received an 80 cent credit for his trouble and stands ready to add to his gains if shares breach $100.00 by expiration. – Potash Corporation of Saskatchewan, Inc. –

LVS -  Profit taking in the January 2011 contract caught our attention this afternoon after one investor “made it big” by utilizing call options on the casino operator. Shares of LVS had attained upward gains earlier in the trading day but are currently lower by more than 0.5% to $12.81. It appears that the trader originally purchased 20,000 calls at the January 15 strike price for 1.70 apiece back on July 9, 2009 when shares closed at $7.42. At that time implied options volatility read 97%. Today he sold the lots to close out the position for 4.35 per contract. If this is indeed what took place, he will have banked gains of 2.65 per contract for a grand total of $5,300,000. This assumes no attached interest in the underlying shares. Implied option volatility has declined during this time to stand at 87% today, negatively impacting the premium of these options, which likely helps…
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Lifting the Axle

Today’s tickers: AXL, PALM, POT, XLF, EMR, AA, & BIIB

AXL – Shares of the Tier 1 supplier of parts and components to the automotive industry have rallied more than 8.5% to a whopping $2.78 today. The improvement in the stock, since touching down to just 26 cents on March 9, 2009, prompted one uber-bullish investor to enact a call spread in the October contract. The trader seems to have determined that the $300 million cut in AXL’s second- and third-quarter revenue streams, felt in the wake of its bankruptcy-brethren GM and Chrysler, will have been replenished by the fall. The summer shutdowns by the automakers are certainly painful for the time being as the two behemoths account for 90% of AXL’s annual revenue. Hoping for a ridiculous turnaround in circumstances, the investor initiated the purchase of 10,000 calls at the October 5.0 strike price for a premium of 40 cents apiece which were spread against the sale of 10,000 calls at the higher October 7.5 strike for about 15 cents each. The net cost of the transaction amounts to 25 cents and yields maximum potential profits of 2.25. Shares will need to grow with the tenacity of the Hulk in order to rally more than 169% over the next five months. – American Axle & Manufacturing Holdings, Inc.

PALM – Put options on the mobile devices company were favored by option investors on the scene today amid a share price decline of 3% to $13.22. One trader targeted the July contract in order to initiate a bearish ratio put spread. The transaction involved the purchase of 2,800 puts at the in-the-money July 14 strike puts for a premium of 2.82 per contract spread against the sale of 5,600 puts at the lower July 10 strike for about 70 cents apiece. The net cost of the pessimistic play on PALM amounts to 1.42 and yields maximum potential profits of 2.58 to the trader if shares decline down to $10.00 by expiration. Profits begin to amass if shares fall another 5% to the breakeven point at $12.58 by expiration next month. Option implied volatility has ramped up significantly over the past couple of days from 93% at the start of Thursday to the current reading of 112% ahead of the release of The Pre tomorrow. – Palm, Inc.

POT– We observed an interesting use of out-of-the-money puts by one investor on
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Phil's Favorites

Momentum Monday - Liquidity, Liquidity, Liquidity...The Startup Multiplier Effect and The SPAC is Back?

 

Momentum Monday – Liquidity, Liquidity, Liquidity…The Startup Multiplier Effect and The SPAC is Back?

Courtesy of Howard Lindzon

Good Monday morning everyone.

I will get right to it…here is this weeks Momentum Monday episode with Ivanhoff and I talking markets and momentum. We share a few new ideas – take a look at $JAMF (Apple has finally come for the Fortune 1000) and $EBAY (the long tail winner of collectibles boom) and let us not forget Tesla back at all-time highs. You can watch/listen to thi...



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Zero Hedge

German Official Warns Risk Of Electric Vehicle Fires Is "Completely Unaddressed" 

Courtesy of ZeroHedge View original post here.

Last month, a massive fire broke out at a German bus depot, destroying 20 electric buses. First responders weren't prepared nor properly trained in extinguishing lithium-ion fires. The fire prompted one German official to question the zero-emissions vehicles as the "spontaneously" combustion of the batteries "is completely unaddressed," according to RT News

"The risk of these fires, including in other locations ...



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Politics

Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Digital Currencies

Bitcoin: why its value has rocketed once again

 

Bitcoin: why its value has rocketed once again

Shutterstock/rzoze19

Courtesy of Andrew Urquhart, University of Reading

Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price. The cryptocurrency was trading at US$66,975 (£48,456) following the launch of an exchange traded fund (ETF) in the US w...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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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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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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