Posts Tagged ‘COP’

Big Bear Put Spread Initiated On ConocoPhillips

 

Today’s tickers: COP, HD & HCA

COP - ConocoPhillips Company – Options on ConocoPhillips are among the most active by volume on Wednesday, with shares in the name down 0.90% on the session to stand at $61.12 as of 12:05 p.m. ET, just hours ahead of the global energy company’s fourth-quarter earnings report after the closing bell. The largest transaction in COP options this morning was the purchase of an Aug. $47.5/$57.5 put spread, established at a net premium outlay of $1.80 per contract. Time and sales data shows blocks of 48,700 puts trading as part of a spread today, with overall volume at each strike topping 50,000 contracts. The bearish position makes money, or provides downside protection, if shares in COP drop 9.0% from the current price of $61.12 to trade below the effective breakeven point at $55.70. Maximum potential profits of $8.20 per contract are available on the spread should ConocoPhillips’ shares slump 22% to settle at a new 52-week low of $47.50 at August expiration. Shares in COP last traded below $47.50 back in February 2010.

HD - Home Depot, Inc. – Bullish options activity on the home improvement retailer this morning looks for shares in Home Depot to improve during the next couple of months. The stock today trades up 0.10% to stand at $67.27 as of 10:45 a.m. ET, after the shares earlier this week rallied to a new 52-week high of $68.15. The heaviest trading traffic in HD options is at the Mar. $65 strike, where upwards of 3,300 in-the-money calls changed hands versus open interest of 1,104 contracts. It looks like most of the call options were purchased by one trader for an average premium of $3.05 apiece during the first 10 minutes of the trading day. The strategist may profit at expiration in March should shares in Home Depot rally X% over the current price of $67.27 to top the average breakeven point at $68.05. The company is scheduled to report fourth-quarter earnings ahead of the opening bell on February 26th.…
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Testy Tuesday – 7.5% or Bust!

Wheee, this is fun!

Will our 7.5% lines hold?  As I mentioned yesterday, we expected a test of our 7.5% lines at  Dow 10,950, S&P 1,160, Nasdaq 2,400, NYSE 7,450 and Russell 690 and we remain TECHNICALLY bullish if we hold them.  The Dollar was doing well until about 3am this morning but then turned down sharply – some sort of rumor is driving the market and, of course, heading into the G20 pretty much any comment made by any Central Banking official is blown way out of proportion.  

China is likely to raise rates today, making a small concession to the US on their exchange rates but more so to cool off the massive property bubble that is forming in their cities.  That may put some downward pressure on commodities without strengthening the dollar – an interesting combo, but one that illustrates how China is becoming more important in the Global marketplace than the US.  

If China is raising their lending rate to 5.56% and their deposit rate to 2.5%, they risk attracting even more money, including a reverse carry-trade from the US, when money can be borrowed from the Fed at 0.25% and lent to China for 2.5% giving the trader a 2.25% profit for the year.  2.25% may not sound that sexy, but when it’s done by Investment Banks and other investors who can lever their money 10:1, that’s a 22.5% on their cash.  This is how Japan has supported their economy for two decades but it’s hard to imagine what will happen if the US Dollar, which makes up 62% of all money on the planet, starts flowing out of the country in even faster quantities.  

pboc1019We were just discussing investing in foreign countries in Member chat and I warned that this may not be the best time to make that kind of move as the dollar is very possibly bottoming here and transferring US Dollars to another currency risks hitting a reversal that wipes out any interest gains and possibly even some the principal as the Dollar rebounds and you find yourself in the wrong currency at the wrong time.  

I guess I should talk about AAPL although we’ve already discussed it in depth in Member Chat but they do seem to have had some kind of earnings and, although very nice – expectations were already a bit high so they…
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Contrarian Player Plants Bull Call Spread on Seed Maker Monsanto Co.

 Today’s tickers: MON, EWZ, XLB, HPQ, V, BCSI & SLB

MON - Monsanto Co. – Shares of the maker of genetically modified seeds seemed to be recovering at the start of the current session following Tuesday’s horrendous performance wherein the stock fell as much as 9.80% from an intraday high of $52.64 to a low of $47.50. MON’s shares managed to rebound 4.50% off Tuesday’s low of $47.50 to briefly touch an intraday high of $49.62, although the rally proved to be short-lived and shares are down 1.00% at $48.25 as of 3:15 pm ET. Though MON was unable to keep hold of earlier gains, one contrarian player is optimistic that Monsanto’s shares will reverse course and head back up by November expiration. The investor purchased a call spread, buying 5,000 calls at the November $55 strike at a premium of $0.85 each, and selling the same number of calls at the higher November $60 strike for a premium of $0.27 apiece. Net premium paid to establish the transaction amounts to $0.58 per contract. Thus, the investor is ready to make money should Monsanto’s shares surge 15.20% over the current price of $48.25 to surpass the effective breakeven point on the spread at $55.58 by November expiration. Maximum potential profits of $4.42 per contract are available to the bullish player if MON’s shares jump 24.35% to trade above $60.00 by expiration day.

EWZ - iShares MSCI Brazil Index ETF – Investors are placing near-term bearish bets on the Brazil fund this afternoon by selling calls to finance the purchase of put spreads in the October contract. The large pessimistic plays could be the work of traders hedging long positions or the mark of outright bearish bettors expecting the price of the underlying fund to slip lower ahead of expiration next month. Shares of the EWZ, an exchange-traded fund designed to replicate the price and yield performance of publicly traded securities in the aggregate in the Brazilian market – as measured by the MSCI Brazil Index, rallied…
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CVS’s Sympathy Rally Inspires Bullish Options Activity

 Today’s tickers: CVS, DRIV, AVP, WAG, ADBE, PHM & COP

CVS - CVS Caremark Corp. – The better-than-expected fourth-quarter earnings report from Walgreen Co. this morning helped CVS’s shares higher during the trading session. Shares rallied as much as 3.365% to rein in an intraday high of $31.64. The increase in the price of the underlying stock inspired one options player to extend bullish sentiment on the stock by initiating a calendar roll. It looks like the investor purchased 10,000 calls at the November $30 strike at a premium of $1.11 each back on September 17, 2010, when shares were trading around $29.72 each. The surge in shares since the purchase bumped up premium on those now in-the-money calls, which the investor sold today for a premium of $2.09 apiece. Net profits on the sale amount to $0.98 per contract. Next the investor renewed optimism on CVS by purchasing a fresh batch of 10,000 calls at the higher January 2011 $32 strike at a premium of $1.64 a-pop. Profits on the new position are available to the trader if CVS’s shares jump 6.3% to surpass the effective breakeven price of $33.64 by expiration day in January.

DRIV - Digital River, Inc. – It looks like an investor expecting Digital River’s shares to remain range-bound through November expiration sold a strangle in the second half of the trading session. Shares of the provider of a variety of marketing solutions and services increased more than 5.50% this afternoon to touch an intraday high of $33.34. The strangle-strategist appears to have sold 2,500 calls at the November $35 strike for a premium of $1.35 each, and sold the same number of puts at the lower November $28 strike at a premium of $0.525 apiece. Gross premium pocketed on the transaction amounts to $1.875 per contract. The trader keeps the full amount of premium received on the strangle play if DRIV’s shares trade within the boundaries of the strike prices described through expiration day. The short positions in both call…
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Option Player Cops a Strangle on ConocoPhillips

Today’s tickers: COP, POT, BAC, HPQ, AMZN, SLV, SPWRA, XEC, WFMI & C

COP – ConocoPhillips – A short strangle employed in the May contract on ConocoPhillips this afternoon suggests one investor expects shares of the underlying stock to remain range-bound through expiration. COP’s shares are down 1.25% to $49.29 with approximately thirty minutes remaining in the trading session. The trader ‘copped’ a strangle play by selling 3,000 puts at the May $46 strike for a premium of $1.77 apiece in combination with the sale of 3,000 calls at the May $52.5 strike for an average premium of $1.13 each. The investor responsible for the transaction pockets a gross premium of $2.90 per contract, and keeps the full amount of premium if ConocoPhillips’ shares trade within the confines of the strike prices described through expiration in May. The short position undertaken in both calls and puts leaves the trader vulnerable to potentially devastating losses should COP-shares swing dramatically in the next few months. Losses accumulate for the investor if shares rally above the upper breakeven price of $55.40, or if the price of the stock plummets through the lower breakeven point at $43.10, ahead of expiration day.

POT – Potash Corp. of Saskatchewan, Inc. – Fertilizer and feed products manufacturer, Potash Corp., attracted bullish options traders this afternoon. POT-shares are up 0.75% today to $114.01 just ahead of the closing bell, which contributes to the more than 14.50% rally in the price of the underlying stock since February 5, 2010, when shares stood at $99.36. Optimistic trading patterns appeared in the March contract where one investor established a ratio call spread. The transaction involved the purchase of roughly 4,500 calls at the March $125 strike for a premium of $1.77 apiece, marked against the sale of about 9,000 calls at the higher March $135 strike for an average premium of $0.52 each. The net cost of the ratio spread amounts to $0.73 per contract. Maximum potential profits of $9.27 per contract pad the investor’s wallet if Potash’s shares rally sharply by 18.50% over the current day’s price to reach $135.00 by March expiration. Shares must increase at least 10.25% before the investor breaks even on the spread at a share price of $125.73.

BAC – Bank of America Corp. – B of A investors have enjoyed an 8.75% rebound in the financial firm’s share price to $15.66 today, up from…
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Optimistic Trader Initiates Call Spread on ConocoPhillips

Today’s tickers: COP, EEM, DE, SIRI, JPM, FCX, T, PCS, MSFT & EK

COP – ConocoPhillips– Oil and gas company, ConocoPhillips, attracted an optimistic options player to the January 2011 contract today. Shares began the trading day on the up-and-up, but reversed direction in the latter portion of the session, falling slightly by 0.20% to $48.26. The long-term bullish strategist purchased a debit call spread to position for upside gains in the underlying share price by expiration next January. The spread involved the purchase of 5,000 calls at the January 2011 $50 strike for an average premium of $3.91 apiece, marked against the sale of the same number of calls at the higher January 2011 $65 strike for about $0.60 each. The net cost of the transaction amounts to $3.31 per contract. The investor responsible for the trade stands ready to accrue maximum potential profits of $11.69 per contract if COP’s shares gain 35% over the current price to reach $65.00 by expiration day. Shares must rise at least 10.5% from today’s price before the call-spreader breaks even on the transaction at $53.31.

EEM – iShares MSCI Emerging Markets Index ETF – Shares of the MSCI Emerging Markets exchange-traded fund fell less than 1% in afternoon trading to stand at $38.47. September contract options trading suggests one investor is positioning for continued downward movement in the price of the underlying stock by expiration. The pessimistic trader established a bearish risk reversal on the fund by selling 5,300 out-of-the-money call options at the September $45 strike for a premium of $1.35 apiece, spread against the purchase of the same number of put options at the September $33 strike for $1.77 each. The investor paid a net $0.42 per contract for the transaction. Profits to the downside accumulate only if shares of the EEM slump another 15.3% from the current price to breach the breakeven point at $32.58 by expiration in the next eight months. We note that the fund’s share price has remained above the $33.00-level since July 15, 2009.

DE – Deere & Co. – Shares of agricultural equipment maker, Deere & Co., are trading 1.80% higher to stand at $52.03 in the first half of the trading day. Notable options activity appeared in the January 2011 contract where one investor initiated a long-term protective play using put options. The trader established a put spread by purchasing 10,000 puts at…
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American Express bulls play calendar spread

Today’s tickers: AXP, JNPR, GE, XLF, JPM, WFC, DNA, COP & XOM

AXP – American Express Company – Shares of the global payments and travel company have rallied by 7% to $11.83, an upward move which is likely due to the news that AXP’s fourth quarter earnings were favorably revised yesterday because of an accounting error. Adjustments boosted earnings per share to 21 cents from the previously recorded 15 cents for the quarter, and net income for the year amounted to $2.7 billion up from $2.63 billion originally. Option traders welcomed the unexpected news and established bullish positions on AXP today. One indication of bullishness was the rash of put selling in the March contract. March 10 and 12.5 strikes were heavily sold. Juxtaposed with the near-term bullishness observed is one far-term optimist on AXP, who sees shares doubling by January 2011. In the January 2010 contract at the 20 strike price 10,000 calls were sold for 95 cents each. Using the 20 strike price in January 2011, 10,000 calls were purchased for 1.95 apiece. For this calendar spread to come good, shares would need to nearly double from the current level. We have to think that this spread is already or will be coupled with underlying stock with the risk that the investor is left deficient of shares in the event of a break through $20.00 ahead of expiration.

JNPR – Juniper Networks Inc. – Shares have remained relatively flat today, having fallen just 0.15% to $13.46. The assured and secure Internet Protocol networking solutions company caught our attention due to its high call-to-put ratio which is currently favoring calls 11 times to every single put in play. But, the majority of the calls traded today were sold, indicated an overall bearish picture of the stock. At the March 13 strike price, 3,300 in-the-money calls were sold for 88 cents apiece – perhaps profit taking by investors exiting existing positions at that strike. At the March 14 strike 3,500 calls were shed for 42 cents apiece. The same trend was observed in the April contract where the April 12 strike price had 4,000 calls sold for 1.96, the 13 strike price saw the sale of over 5,100 calls for a premium of 1.28, and the 14 strike had more than 3,600 calls sold for 80 cents per contract. Implied volatility has come off since yesterday reading of 60% to…
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Phil's Favorites

John Roque on the decline of technical indicators

 

John Roque on the decline of technical indicators

Courtesy of 

 

 

Barry spoke with John Roque, one of the most respected technical analysts in the industry, formerly of Soros Fund Management, about why some of the classical technical indicators are no longer working in the modern markets. You don’t want to miss this one.

And be sure to subscribe to our channel, as thousands of investors already have.

...

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Kimble Charting Solutions

New York Stock Exchange Double Topping or Sending A Strong Bullish Message?

Courtesy of Chris Kimble

A very broad index is testing last year’s highs, as monthly momentum is creating lower highs? Which indicator is more important, price or momentum?

This chart looks at the New York Stock Exchange Index (NYSE) on a monthly basis over the past 15-years.

The index peaked in January of 2018, as momentum was the highest since the peak in 2007.

The rally off the lows around Christmas last year, has the index testing the highs of January 2018. While the rally has taken place over the past 12-months, lofty momentum has created a series of lower highs.

Can you believe th...



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Zero Hedge

Dow Dives Into Red, Home Depot Hammered

Courtesy of ZeroHedge View original post here.

Another overnight ramp evaporates...

As Home Depot weighs heavy on The Dow...

But the consumer is strong, right?

Treasury yields are tumbling too...

Source: Bloomberg

...

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Insider Scoop

10 Biggest Price Target Changes For Tuesday

Courtesy of Benzinga

  • UBS raised AbbVie Inc (NYSE: ABBV) price target from $79 to $96. AbbVie shares closed at $88.73 on Monday.
  • JP Morgan lowered the price target for Intelsat SA (NYSE: I) from $22 to $9. Intelsat shares closed at $8.03 on Monday.
  • DA Davidson boosted the price target on Okta Inc (NASDAQ: OKTA) from $131 to $135. Okta closed at $121.15 on Monday.
  • Stifel lifted the price target for Leggett & Platt, Inc. (NYSE: ...


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Lee's Free Thinking

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

 

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

Courtesy of , Wall Street Examiner

Here’s today’s press release (11/14/19) from the NY Fed verbatim. They’ve announced that they will be making special holiday welfare payments to the Primary Dealers this Christmas season. I have highlighted the relevant text.

The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo)...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Chart School

Dow Jones cycle update and are we there yet?

Courtesy of Read the Ticker

Today the Dow and the SP500 are making new all time highs. However all long and strong bull markets end on a new all time high. Today no one knows how many new all time highs are to go, maybe 1 or 100+ more to go, who knows! So are we there yet?

readtheticker.com combine market tools from Richard Wyckoff, Jim Hurst and William Gann to understand and forecast price action. In concept terms (in order), demand and supply, market cycles, and time to price analysis. 

Cycle are excellent to understand the wider picture, after all markets do not move in a straight line and bear markets do follow bull markets. 



CHART 1: The Dow Jones Industrial average with the 900 period cycle.

A) Red Cycle:...

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Digital Currencies

Is Bitcoin a Macro Asset?

 

Is Bitcoin a Macro Asset?

Courtesy of 

As part of Coindesk’s popup podcast series centered around today’s Invest conference, I answered a few questions for Nolan Bauerly about Bitcoin from a wealth management perspective. I decided in December of 2017 that investing directly into crypto currencies was unnecessary and not a good use of a portfolio’s allocation slots. I remain in this posture today but I am openminded about how this may change in the future.

You can listen to this short exchange below:

...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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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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