Posts Tagged ‘EWT’

Bullish Trader Quenches Thirst for Calls by Assembling Ratio Spread on PepsiCo

Today’s tickers: PEP, ODP, PFE, EK, AET, PFE, EWT, BIDU, ZION & SII

PEP – PepsiCo, Inc. – Global beverage and snack company, PepsiCo, attracted the attention of bullish option traders in late afternoon trading. PEP’s shares appreciated just less than 1% during the session to stand at $62.05 with 45 minutes remaining before the closing bell. It looks like one trader initiated a ratio call spread on the stock in order to position for continued upward momentum in the price of the underlying through expiration in April. The investor purchased 6,000 calls at the April $62.5 strike for an average premium of $1.93 apiece, spread against the sale of 12,000 calls at the higher April $65 strike for roughly $0.92 each. The net cost of the transaction amounts to just $0.09 per contract. Shares need only rise $0.54 over the current price in order for the investor to breakeven on the trade. Maximum available profits of $2.41 per contract accumulate if the price of PEP’s shares rally 4.75% to $65.00 by expiration day in April.

ODP – Office Depot, Inc. – A sold strangle play on the global supplier of office supplies this afternoon indicates one investor expects shares of Office Depot to remain range-bound for the next several months. ODP’s shares improved 1.25% during the trading day to arrive at $6.61 each. It appears the investor sold 15,000 calls at the April $7.5 strike for a premium of $0.30 apiece, and sold 15,000 put options at the lower April $6 strike for an average premium of $0.47 each. The strangler pockets a gross premium of $0.77 per contract, which he keeps in full as long as shares of the office supplies company trade within the strike prices described above, through expiration. Lower volatility in the price of the underlying shares as well as declines in option implied volatility on the stock benefit the investor in this case. The trader is exposed to losses, however, if shares of Office Depot swing outside of the upper breakeven price of $8.27, or if the stock declines beneath the lower breakeven point at $5.23 by expiration.

PFE – Pfizer, Inc. – Massive chunks of long-dated call options traded on the pharmaceutical company this afternoon. It is unclear what the exact motivation or position of the responsible party is, but it certainly appears to be the work of a Pfizer-bull. Shares continue to…
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Hi-Ho Long-Term Silver Bulls!

Today’s tickers: SLV, EWT, CL, BG, ILMN, COH, TMO, SPG, BG, ADSK & SLM

SLV – iShares Silver Trust ETF – A bull call spread in the January 2011 contract on the silver ETF today suggests shares of the SLV may rally significantly over the next year and two months time. Shares of the SLV are currently up 0.5% to $18.23. The silver-bull purchased a ratio call spread by buying 3,000 calls at the January 23 strike for an average premium of 1.93 apiece, and selling 6,000 calls at the higher January 30 strike for about 90 cents each. The net cost of the transaction is reduced to just 13 cents per contract. Shares of the fund must rally at least 27% before the investor breaks even at a price of $23.13. The trader stands ready to accumulate maximum potential profits of 6.87 per contract if the stock surges up to $30.00 by January 2011.

EWT – iShares MSCI Taiwan Index ETF – A massive bearish play on the Taiwan Index exchange-traded fund caught our attention this afternoon with shares of the EWT down 0.5% to $12.64 in late-day trading. It appears one investor established a bearish risk reversal in the December contract to position for potential share price declines through expiration. The trader sold 31,000 calls at the December 13 strike for 20 cents premium apiece, spread against the purchase of 31,000 puts at the lower December 12 strike for 20 cents each. The sale of the calls exactly offset the cost of buying the puts. Essentially the reversal is a “free” bet that shares of the EWT will trend lower ahead of the 2010. The investor responsible for the transaction is likely long shares of the underlying fund and seeking protection to the downside. If shares fall beneath $12.00, the value of the underlying position is protected. However, if shares of the fund rally by expiration, the trader risks having shares of the stock called from him at $13.00 apiece.

CL – Colgate-Palmolive Co. – Speculation that Reckitt Benckiser Group may acquire Colgate-Palmolive spurred an all-out call option feeding frenzy on CL today and lifted shares of the U.S. company to a new 52-week high of $86.33. Investors flooded the November and December contracts, scooping up call options to position for further upward movement in the price of the underlying. The sudden surge in demand for Colgate-Palmolive options…
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Where Did All the Volatility Go?

Today’s tickers: VIX, EEM, XLU, EWT, AA, ESLR, UNH, HOT & DE

VIX– Summer’s here – you can tell by the fact that volatility is on the wane again that investors are winding down for the summer season. The market’s fear gauge has slipped back again and stands at a level not seen since last September. Today the VIX is trading at 27.45 as most investors see less need to pay higher premiums for protective strategies. Meanwhile, signs of recovery have created the impression that a market rally might feed on itself and has prompted many investors to write options recently. There hope is that as implied volatility erodes the fact that premiums will deflate would afford profits by buying those same options back later. However, the noise coming out of the Chicago Board Options Exchange today is over a July call spread using VIX options that relies on a market swan dive over the coming 41 days before it would earn profits. One trader spent an $850,000 premium on buying 20,000 July calls at the 45 strike while selling the same amount of 55 strike calls, thus lowering the overall premium to 42.5 cents. The VIX hasn’t traded above 40 since April 21 and we’re wondering what this guy knows that no one else does. – CBOE Volatility index

EEM– Shares of the emerging markets ETF have rallied more than 2.5% today to $34.47. The fund has enjoyed a nice run up over the past four months, gaining more than 72% since March 2, 2009, when shares were trading at $19.95. A trade observed in the September contract indicates that at least one investor is crossing his fingers for continued bullish movement in the stock through expiration in September. The trader targeted the now in-the-money September 34 strike price and sold 10,000 puts for 3.10 apiece in order to finance the purchase of 10,000 calls for 2.77 a pop. The investor receives a credit of 33 cents for the transaction. He will add to today’s profits if the EEM can continue to climb higher. – iShares MSCI Emerging Markets Index ETF

XLU – The utilities ETF has experienced a more than 2.5% increase in shares to $28.02. The XLU ticker symbol jumped onto our ‘most active by options volume’ market scanner after one investor sunk his teeth into a chunk of put options in the September contract.
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Market bullish, options bearish

Today’s tickers: XLI, XLY, DELL, CAT, XLF, AET, AN, EWT, SLAB, QLGC, BYD & INTC

XLI Industrial Select Sector SPDR – The industrials ETF attracted massive amounts of downside protection by investors fearing a near-term contraction in shares of the fund. The price per share is currently up by 3% to $23.19 on the day following broader market gains experienced today. However, traders have enacted a decidedly bearish position on the fund in the near-term May contract. At the May 19 strike price more than 65,100 puts were purchased for an average premium of 17 cents apiece. These option contracts will begin to yield profits to the downside beginning at the breakeven share price of $18.83. Further along, the in-the-money June 23 strike price saw traders who were likely banking gains on the rise in shares today by selling approximately 27,000 calls for an average premium of 65 cents per contract.

XLY Consumer Discretionary Select Sector SPDR – The consumer discretionary ETF jumped onto our ‘most active by options volume’ market scanner after investors bought a huge chunk of puts in the near-term May contract. Shares have rallied by 4% to $21.80 today, creating lesser cost premiums on put options. At the May 20 strike price approximately 58,100 puts were picked up for an average premium of 18 cents apiece. Investors have certainly appeared to brace themselves for bearish movements in the fund. Fleshing out the pessimistic picture was the sale of 2,290 calls at the May 23 strike for 82 cents which indicates that traders do not see today’s rally stemming too much further, particularly in the near-term.

DELL Dell Inc. – The just-in-time manufacturer of personal computers has rallied by more than 4% to $11.35 amid broad market gains today. We observed one trader who appears to have established a covered call in the January 2010 contract. It is likely that this investor bought shares of the underlying stock today or was already long the stock previously, and then sold 24,500 calls at the January 12.5 strike price for a premium of 1.50 each. The trader pockets the 1.50 premium and has locked into gains of 10% on the rise in share price should the calls land in-the-money and the underlying stock get called from him at expiration next year.

CAT Caterpillar, Inc. – Shares of CAT have rallied by more than 3.5% today to arrive at…
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Zero Hedge

Trash Wars: Duterte Orders Tons Of Garbage Shipped Back To Canada Or Dumped In Territorial Waters

Courtesy of ZeroHedge. View original post here.

Outspoken Philippines President Rodrigo Duterte has ordered that containers carrying trash from Canada should be shipped back to the country. It is the latest chapter in a disagreement over more than 100 containers of trash that were shipped to the Philippines between 2013 and 2014, illegally, by a Canadian company. 

Canada had previously agreed to take the trash back, but has been slow in making arrangements for its return. Duterte threatened to leave the trash in Canadian waters if Ottawa refuses to take it back, according to Salvador Panelo...



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Phil's Favorites

Animal Spirits: The Absence of Stuff

 

Animal Spirits: The Absence of Stuff

Courtesy of 

Mention Animal Spirits to receive 20% off from YCharts (*New YCharts users only)

Stories Discussed

Best graduation ever

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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Insider Scoop

55 Biggest Movers From Yesterday

Courtesy of Benzinga.

Gainers
  • Obalon Therapeutics, Inc. (NASDAQ: OBLN) shares jumped 233.3 percent to close at $1.30 on Wednesday after the company reported expanded data from a large scale commercial use study that was presented at the Digestive Disease Week.
  • Ascent Capital Group, Inc. (NASDAQ: ASCMA) shares jumped 51.4 percent to close at $1.37 after the company announced a restructuring support agreement with Monitronics International.
  • Valeritas Holdings, Inc. (NASDAQ: VLRX) shares dippe...


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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"

 

 

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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.

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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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