Posts Tagged ‘CI’

Strangle Strategist Tightens Grip on JPMorgan

Today’s tickers: JPM, TIVO, RHT, UTX, CSCO, CI, BA, XRX, DIS, AKS & M

JPM – JPMorgan Chase & Co. – A long strangle enacted on JPMorgan today indicates one investor is expecting the firm to experience a significant shift in the price of its shares by June expiration. The investment banking and financial services giant realized a 1% rally in share price during the current session to $41.94. The investor initiated the strangle strategy by purchasing 9,000 calls at the June $46 strike for a premium of $1.06 apiece and by picking up 9,000 puts at the June $36 strike for $0.96 each. The net cost of the transaction amounts to $2.02 per contract. Strangle-players benefit from drastic moves in share price, but lose out if the value of the stock stagnates. In this specific trade, the investor profits if JPM’s shares rally above the upper breakeven price of $48.02 by expiration, or if shares trade below the lower breakeven point at $33.98, by June expiration. The trader is looking for increased volatility in the price of the underlying shares, but also may benefit from higher options implied volatility. Moves higher in options implied volatility corresponds with greater option premium on both calls and puts. Thus, the investor could potentially sell the strangle at a profit ahead of expiration day if combined premium on the trade exceeds the $2.02 per contract paid today. We note that JPM’s shares have not exceeded $47.47 in the past year, but did trade as low as $14.96 back on March 6, 2009.

TIVO – TiVo, Inc. – Shares of the innovator of digital-video recording services surged as much as 61.30% to an intraday high of $16.42, the highest price recorded for TiVo’s shares in at least five years. TiVo was named the victor today after a U.S. appeals court ruled that Dish Network Corp. and EchoStar Corp. are “still infringing its patent and should stop providing digital-video recording services.” Options traders had a field day with the news and exchanged upwards of 275,300 contracts on the stock by 3:10 pm (ET). Today’s options trading volume on TiVo represents just under 80% of the total existing open interest on the stock of 348,203 contracts. Investors populated the stock with a plethora of trading strategies. Some traders banked profits on the rally, while others employed the use of strangles. Plain-vanilla call buying and put selling…
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PSW Rewind of 2009 – The First Quarter

Thursday's close was very exciting, wasn't it?

Well it sure was for us as my 10:01 Alert to Members was a play on the DIA Jan $103 puts at .56.  Thanks to the late afternoon dip, they finished the day at .90 (up 60%) after peaking out at .95, a very nice win to close off the year.  That was the only Alert trade all week as this market has been too tough to call and we don't make trades just for the hell of it.  I had been sniping at DIA puts all week expecting a pay-off but Thursday it finally came together.

Of course, I also strongly advocated hedging on Thursday morning and listed 4 trade ideas in the morning post to hedge ourselves against the possibility of just such a drop so don't say you haven't been warned.  Whether there will be follow-through on Monday or a full reversal remains to be seen and, even if I knew, I wouldn't tell you here because this is a review – predictions are another article entirely

We treaded very cautiously into last year because our PSW Holiday Retail Survey was not looking very pretty so it was no surprise to us, on Dec 26th, when we got some horrific retail reports.  These are, of course, the same reports that we "beat" this year – but not by much.  Dec 29th was Monday and Israeli jets attacked Hamas targets in the Gaza sending oil flying up to $48 a barrel.  That gave us a nice commodity rally into the close of the year but January 2nd was a Friday and we decided (fortunately) to take the money and run on our long plays, holding open our main cover of SKF Jan $120s at $4.35, which hit $80 later in the month (up 1,732%) and USO Feb $32 puts at $3.40, which hit $10.50 in the Feb dip (up 208%) so, on the whole, not too differently positioned than we are now, coming into the new year.  Visually 2009 looked a little like this:

January – Waiting for Obama, or Something, to Change

We began January much the same way we ended December with my Wed Jan
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AAPL-Bull Buys Call Spread

Today’s tickers: AAPL, GLD, XLU, AEP, CI, CHK, XEL, OSK, LLL, JAVA & BSX

AAPL – Apple, Inc. – A long-term bullish play on the iPod manufacturer suggests the price of the stock could skyrocket by July 2010. Apple’s shares increased more than 1% during the session to $196.96. It looks like one trader initiated a call spread in the July contract to position for a significant jump in the price of the underlying in the next seven months. The investor purchased 3,000 calls at the July 220 strike for a premium of 13.60 apiece, and sold the same number of calls at the higher July 250 strike for about 6.18 each. The net cost of the bullish play amounts to 7.42 per contract. AAPL’s shares must surge 15.5% from the current price in order to reach the breakeven point on the trade at $227.42. Maximum potential profits of 22.58 per contract are available to the investor if the stock jumps 27% to $250.00 by expiration in July.

GLD – SPDR Gold Trust ETF – A bullish risk reversal on the gold ETF today points to a rebound in gold bullion prices by expiration in February 2010. Shares of the GLD added nearly 1% during the trading day to stand at $110.23. One trader sold 9,650 puts at the February 110 strike for 4.70 each in order to partially finance the purchase of 9,650 calls at the same strike for 4.90 apiece. The net cost of the reversal amounts to just 20 cents per contract. Profits amass on the transaction if shares of the fund rally through the breakeven price of $110.20 by expiration day in February 2010.

XLU – SPDR Utilities Select Sector ETF – Shares of the exchange-traded fund comprised of common stocks of companies from the electric utilities, multi-utilities, independent power producers, energy traders and gas utility industries, increased 0.75% during the trading day to a new 52-week high of $32.08. The fresh high for the fund perhaps inspired the bullish options activity we observed on the XLU today. One investor banked profits on a previously established long call position in the January 2010 contract. The trader originally bought 5,000 calls at the January 29 strike for a premium of 92 cents apiece back on November 6, 2009, when shares were at $28.90. The investor sold the calls today for 2.95 apiece and took in net profits…
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Bulls singing Yahoo! in tune

Today’s tickers: YHOO, MMR, FXI, CI, HOG, KFT, NUAN & VMC

YHOO Yahoo!, Inc. – Shares have rallied by more than 2% to $14.32 amid news that the company is seeking buyers for its HotJobs employment website and has plans to cut some 200 to 500 jobs. Perhaps investor confidence has been bolstered by the past few months with CEO Carol Bartz at the helm as the stock has risen about 29% from its January 2009 low of around $11.03 up to today’s price. Option investors were seen taking bullish stances on the stock in the May and October contracts. At the May 15 strike price 26,600 calls were purchased for an average premium of 77 cents apiece. Shares would need to rise by another 10% in order to breach the breakeven point on the trade at $15.77 by expiration in May. Further along, the October 12 strike price witnessed the sale of 2,100 puts for a premium of 1.30 each. Some traders were showing caution in the May contract by purchasing 4,500 puts at the May 14 strike price for 99 cents should shares experience a decline in the near future. These put options would begin to provide downside protection or profits beginning at the breakeven point to the downside at $13.01. Option implied volatility on Yahoo! is up sharply today to 74% from yesterday’s reading of 67%.

MMR McMoRan Exploration Co. – Shares of the oil and natural gas company have declined slightly by less than 1% today to stand at $5.22. Despite the fall in share price, one investor does not see shares falling much further as he sold more than 14,000 puts at the May 5.0 strike price for a premium of 50 cents apiece. There is currently no open interest at the May 5.0 strike, and thus this trader accepts the 50 cent premium in exchange for bearing the risk that shares fall beneath the breakeven point to the downside at $4.50. Should shares plummet through the breakeven point, the investor would face increasing losses in proportion with declines in the stock. The puts traded today represent nearly 40% of the existing open interest on the stock of 38,000 contracts. While we do not know the exact motivation for the trade, we do know that shares need only decline by 13% from the current price for this investor to face losses.

FXI iShares FTSE/Xinhua China 25
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Phil's Favorites

Designed to deceive: How gambling distorts reality and hooks your brain

 

Designed to deceive: How gambling distorts reality and hooks your brain

The longer they keep you plugged in to a game, the better it is for the house. AP Photo/Seth Wenig

Courtesy of Mike Robinson, Wesleyan University

To call gambling a “game of chance” evokes fun, random luck and a sense of collective engagement. These playful connotations may be part of why almost 80 percent of American adults gamble at some point in their lifetime. When I ask my psychology students why they think people gamble,...



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Zero Hedge

Citi Ready To Replace "Tens Of Thousands" Of Call-Center Workers With Robots

Courtesy of ZeroHedge. View original post here.

Citigroup is apparently preparing to follow through on its promise it shed as many as 20,000 operations and technology positions, according to an interview with CEO Mike Corbat that was published Tuesday in the Financial Times.

...



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ValueWalk

Current Quarterly Earnings Forecasts Accentuate The Negative

By Jacob Wolinsky. Originally published at ValueWalk.

In revising their forecasts of companies’ current quarterly earnings, analysts accentuate the negative, new research finds

3844328 / PixabayWidely available earnings forecasts not as informative as many think

It may be the most persistent criticism leveled against stock analysts – excessive optimism, what is widely perceived to be a tendency to be more upbeat about the companies they cover than the facts...



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Kimble Charting Solutions

Doc Copper About To Hurdle Important Breakout Level?

Courtesy of Chris Kimble.

Doc Copper often times sends important messages, to the global economy, reflecting growth or lack thereof. An important price test is currently in play for Ole Doc Copper!

The long-term trend for Copper remains up, as it has created a series of higher lows for the past 18-years along line (1). Over the past few months, Copper could be creating a double bottom just above this long-term rising support line at (2).

The small rally of late has Doc Copper testing the top of its 6-month trading range at (3).

Can ole Doc Copper hurdle this important breakout leve...



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Insider Scoop

The Street's Early Reaction To Walmart's Q4 Beat

Courtesy of Benzinga.

Related WMT Mid-Morning Market Update: Markets Edge Higher; Walmart Tops Q4 Expectations Walmart Brings Bright Spot T...

http://www.insidercow.com/ more from Insider

Digital Currencies

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes

Courtesy of Zero Hedge

Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...

Source: Coin360

Ethereum is leading the charge follow...



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Chart School

Weekly Market Recap Feb 17, 2019

Courtesy of Blain.

The “V” shape bounce continues in unrelenting fashion as bulls are stampeding bears in 2019!  All due to a little “patience” from the Federal Reserve.  It is really quite breathtaking but we have seen it repeatedly the past decade as the Federal Reserve pours gas on the market.  Hopes for a deal with China also spurred the action upward.  Rallies (both with gap ups) on Tuesday and Friday provided the juice this week.   The S&P 500 is back over its 200 day moving average after being below for 46 days – it’s longest period of time below that level since March 2016.

Mat Klody, chief investment officer at Keebeck Wealth Management, told MarketWatch that the major benchmarks’ steady march higher since the beginning of the year is being driven &#x...



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Biotech

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

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

 

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Illustration of acute lymphoblastic leukaemia, showing lymphoblasts in blood. Kateryna Kon/Shutterstock

Courtesy of Alba Rodriguez-Meira, University of Oxford and Adam Mead, University of Oxford

...

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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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