Posts Tagged ‘EXPE’

Expedia Options Volume Jumps As Shares Tumble

Today’s tickers: EXPE, KO & HAL

EXPE - Expedia, Inc. – Shares in online travel company, Expedia, Inc., are getting pummeled today, down as much as 27% during morning trading to a new 52-week low of $47.55, after the company yesterday reported second-quarter earnings and revenue that missed analyst estimates. Some options traders are bracing for further near-term declines in the price of the underlying shares, snapping up roughly 1,000 Aug $45 strike puts for an average premium of $0.64 apiece. The contracts make money at expiration next month if shares in Expedia drop 6.7% from today’s low of $47.55 to breach the average breakeven point on the downside at $44.36. The Sep $45 strike put options are also attracting fresh interest, with around 2,500 contracts in play versus open interest of just 50 contracts. It looks like most of the Sep $45 puts were purchased for an average premium of $1.20 apiece this morning. Meanwhile, trading traffic in the Jan 2014 calls suggests one trader may be positioning for shares in the name to rebound significantly by expiration next year. The strategist appears to have purchased a 1,500-lot Jan 2014 $54.48/$64.48 bull call spread at a net premium of $1.75 per contract. The spread starts making money if shares in Expedia rally 18% off today’s low to exceed the effective breakeven price of $56.23, with maximum potential profits of $8.25 per contract available on the position given a more than 35% upside move in the price of the underlying to $64.48 by expiration next year.

KO - Coca-Cola Co. – Activity in Coca-Cola Co. weekly put options on Friday morning indicates some traders are positioning for shares in the world’s largest beverage maker to extend declines during the next five trading sessions. Shares in KO are off 1.7% today at $40.15…
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Fusion-io Calls Change Hands As Shares Rebound

 

Today’s tickers: FIO, EXPE & BID

FIO - Fusion-io, Inc. – Shares in the provider of big data storage solutions are in recovery mode on Friday, up 3.3% at $14.70 as of 11:10 a.m. ET, on the heels of a sharp selloff earlier in the week. The stock dropped 27%, the most ever, to a record low of $13.13 on Wednesday after Fusion-io’s CEO, David Flynn, and co-founder, Rick White, resigned. The company issued a press release on Wednesday announcing the management changes, naming former EVP and Chief Strategy and Technology Officer at Hewlett-Packard Co., Shane Robison, Fusion-io’s new Chairman and CEO. Options changing hands on FIO this morning indicates some traders are positioning for shares in the name to continue to recover in the near term. The most actively traded contracts as measured by volume are the Jun $16 strike calls, with volume currently topping 13,000 contracts versus open interest of 2,713 lots. Most of the $16 strike calls appear to have been purchased during the first 30 minutes of the trading session for an average premium of $0.65 each. Buyers of the upside calls stand ready to profit at expiration should shares in FIO rally more than 13% over the current price of $14.70 to surpass the average breakeven point at $16.65.

EXPE - Expedia, Inc. – Options in play on online travel company, Expedia, Inc., today are looking for shares in the name to rally substantially during the next couple of months. The stock, which advanced 3.4% to $57.89 by 11:30 a.m. in New York, is down roughly 15% off a record high of $68.09 achieved back in February. EXPE shares at the current level are still up more than 40% since this time last year. A sizable print in Expedia calls straight out of the gate this morning positions one strategist to benefit from continued gains in the price of the underlying. It looks like the trader purchased 3,000 calls at the July $59.48 strike for a premium of $2.05 per contract. The position…
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Options Eye Higher Highs For Expedia; Downside Puts In Play On Masco

 

Today’s tickers: EXPE, MAS & OVTI

EXPE - Expedia, Inc. – Traders positioning for shares in the online travel site to continue to hit new highs stepped up to purchase bullish call options on Expedia this morning, with shares in the name trading up nearly 6% this morning at a new high of $60.29. Expedia shares are moving higher on Friday after the stock was raised to ‘Buy’ from ‘Hold’ with an increased target price of $68.00 at Deutsche Bank, and was rated new ‘Buy’ with a 12-month target share price of $64.00 at Cantor Fitzgerald. The stock, which has gained nearly 125% since Expedia, Inc. spun off its TripAdvisor unit last year, may have more room to run according to some options players today. Bullish strategists preparing for fresh highs in the near term purchased more than 2,000 calls at the Oct. $60 strike for an average premium of $2.23 apiece. Call buyers profit at expiration next month as long as Expedia’s shares increase another 3% to top the average breakeven price of $62.23.

MAS - Masco Corp.– A large trade in Masco Corp. put options suggests one options player may be securing downside protection on the maker of home improvement and building products, as shares in the high-flying stock tack on another 2.5% today to secure a two-year high of $16.48. The purchase of a block of 40,000 puts at the Jan. 2013 $15 strike this morning for a premium of $1.10 apiece may be the work of an investor hedging a large position in the underlying shares, possibly to lock in gains enjoyed during the stock’s impressive 150% move higher since October 2011. Alternatively, the sizable stake in MAS puts could be an outright bearish bet on the stock, initiated in an attempt to benefit from a pullback in the price of the underlying during the next four months. Profits, or downside protection, kick in if shares in Masco Corp. drop 15.7%…
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Wednesday Wheeeee – Can the Markets Handle Rejection?

Rejected!

After hitting our lines ON THE BUTTON across the board (see yesterday's perfect predictions), we're taking a little pre-market tumble this morning led lower by our favorite short – PCLN, which has negotiated their way to a 15% drop on an earnings miss that didn't surprise any of our Members as it's been a focus short of ours for ages and is in both of our $25,000 Portfolios as well as our Long Put List with the Oct $540 puts, which we rolled into from the $510 puts for a net of $7.  

With PCLN dropping to $575 pre-market, we won't do as well as we did on CMG last month (another focus put of ours) but we should get about $25, which will add, at 5 contracts, $9,000 to our $25KPs!  When asked why we were shorting PCLN in yesterday's Member Chat, my response was:  

Because the exchange rate sucks for one thing (PCLN is very big in Europe), because a great Q is priced in as PCLN has zoomed up with EXPE from last Q but are now outpacing EXPE (who are a much better company) by 20% over the past year.  Also, PCLN has been diversifying into regular travel and cannibalizing their own business and, of course, because PCLN has a p/e of 30, which is a good 50% above the rest of the sector.

SPY WEEKLYThat pretty much sums up PCLN's earnings report.  They are not a terrible company, they were simply over-priced into earnings and we took advantage of it.  Now that we've had our little correction, we're moving on.  We pressed our bearish bets yesterday as we expected a rejection at our Must Hold levels and my comment to Members on the way up was: "If you are going to be bearish – days like this are when you dig in your heels and shore up your positions – not the day you capitulate!"    

As you can see from Dave Fry's SPY chart, the "rally" looks a lit less impressive if you notice the volume, which is lower now than it was before we went off the cliff in May or August or July of last year.  Traders never seem to learn that these resistance lines are very hard to cross when there is a lack of participation but it's not because of any…
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Expedia Options Eye Higher Highs On The Horizon

 

Today’s tickers: EXPE, AMGN & GDOT

EXPE - Expedia, Inc. – Online travel company Expedia, Inc.’s shares have been on a tear this year. The stock jumped 28% today to hit $58.40 after the company reported higher-than-expected revenue for the second quarter and boosted its quarterly dividend to $0.13 a share. The huge upside move in the stock today lifted Expedia’s gains to 95% for the year so far and spurred heavier-than-usual trading in EXPE options. Traders positioning for the price of the underlying to hit fresh highs snapped up $60 strike calls expiring in August and September this morning, while other strategists appear to be taking profits on bullish strategies initiated ahead of the earnings report. Upside call buyers looked to the Aug. $60 strike where more than 1,700 lots are in play versus previously existing open interest of 308 contracts. Traders driving volume in the $60 calls purchased most of the contracts for an average premium of $0.85 each and stand ready to profit at expiration should shares rally 9% over the current price of $56.00 (as of 12:37 p.m. ET) to settle above $60.85 by expiration. The Sept. $60 strike call is also active today; volume is above 1,800 contracts at present against zero open positions. The most heavily traded calls on Expedia today are the Aug. $50s; volume currently exceeds 10,600 contracts versus open interest in excess of 18,300 contracts. Open interest in the contracts increased sharply this week ahead of earnings as buyers positioned for an approximate 10% move higher in the shares. A far larger upside move than anticipated has the contracts deep in-the-money and it appears some traders may be taking profits off the table. Premium on the Aug. $50 calls this week was between $1.05 and $1.60 per contract; the sale of more than 5,800 contracts this morning for an average premium of $5.31 apiece suggests some strategists may have walked away with substantial gains in hand.…
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Which Way Wednesday – $3.5Tn Not Enough to Prop up Markets?

SPY WEEKLYUh-oh!

Wasn't it just 2 days ago that the EU was all set to pop the ESM to $1.25Tn and the IMF was going to add another Trillion and the Fed was talking about more QE in the $1.25Tn range, which plunged the Dollar to multi-week lows?  Shouldn't adding 6% of the entire planet's GDP in additional stimulus give us more than a one-day pop in the markets? 

As I pointed out in Monday's Morning Alert to Members – these are all just RUMORS and my conclusion in the Alert was: 

Despite the bullish turn of events (which we anticipated last week) we're more inclined to cash out our bullish trades into the excitement and press our bear bets and TOMORROW, if we're still over our levels – THEN we will scramble to add some aggressive bullish trades to our virtual portfolios.  Again, I cannot stress enough that CASH is my preferred position because this market is tough to call and you need to be very flexible and very nimble to trade it.

SPY 5 MINUTEWe proceeded as planned and, so far, we haven't had any reason to capitulate and get more bullish and that is both surprising and disappointing as this is the end of the first quarter of 2012 – if not now – when?  As David Fry notes

Monday’s rally was typical as we head toward the end of the quarter. Hedge fund performance fees are on the line and any way to boost these profits is job one. Top holdings for hedge funds include the usual suspects: AAPL, IBM, INTC, BAC, DIS, HD etc.

With little volume it’s easy for algos and hedge funds to prop stocks on little hard news. Tuesday we briefly saw more of this. Just as markets were weakening a story appeared using the Fed’s favorite oracle, the WSJ, as Fed governor Rosengren stated, “more stimulus is on the table”. Immediately HFT algos jumped and markets rose if only briefly. 

It's very exciting for us as PLCN (see Thursday's notes) went all the way up to $736 on Monday and sold off on some pretty heavy trading yesterday.  Slowly but surely, our negative premise is beginning to take shape as Piper Jaffray is finally catching up with us and noting "a sharp decline in unique visitors to Priceline's booking.com" from growth of 61 percent during the…
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Fall-Back Thursday – Time To Get Real?

Do you REALLY think this will go on forever?

On the right is the AAPL quarterly chart but it could also be the quarterly chart of SHLD, NFLX, FOSL, STX or PCLN (Bespoke Chart), all of whom are up more than AAPL (which is up 50%) in 2012.  We've discussed PCLN as one of my favorite shorts and we had a good discussion in Member chat last night comparing PCLN to EXPE, who drop the same amount of cash to the bottom line (before buybacks and dividends) but have just 1/8th of the market cap of PCLN.   

Sure you can say that PCLN is twice as good as EXPE (it isn't, but you can say it) but can you say it's 4 times as good?  How about 8 times?  EXPE nets $500M a year – 8 times that is $4Bn – more money than the entire travel sector makes!  How, exactly, will PCLN grow into that valuation?  Eliminate all competition and then grow the sector by 50%?  Well, that's pretty much what AAPL did but how many AAPLs can you have in one market?  

THAT is the problem my friends.  Aside from the macro concerns we discussed in yesterday's post, we have a sort of value mania that is driven by the very real success of one company, much the way we had a dot com boom in the late 90s driven by the very real success of just a few companies.  Back then, everyone was the next QCOM, YHOO, MSFT, CSCO – whichever category you were supposed to be the best.  Qualcomm, in fact, was the best performing tech stock of 1999, gaining 2,619% that year and finishing right about $100.  By the end of July, 2002, they were trading at $10 but hey, what a ride!  

In fact, here's the CNet story from Dec 29th, 1999 titled "Qualcomm Jumps on $1,000 Price Target" and coming on the heels of "Qualcomm to offer Net2Phone services in Eudora" it's no wonder people were super-excited!  AMZN was "only" up 25% that year to $100 but Jeff Bezos was Time's Man of the Year and yes, their business has been growing at an amazing rate for the past 12 years and they have crushed their competition and dominated the sector – and gained less than 6%…
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Time Warner Cable Call Buyer Tunes in for a Rally

Today’s tickers: TWC, RVBD, EXPE & CL

TWC - Time Warner Cable Inc. – An investor expecting shares in Time Warner Cable to pop ahead of March expiration initiated a large stock and option combination play just before 12:30pm in New York. Shares in the TWC are currently down 0.80% this afternoon to stand at $70.53. It looks like the trader enacted a delta neutral position, selling 150,000 shares of the underlying at $70.60 each, and buying 10,000 calls at the March $75 strike at a premium of $0.25 a-pop, on a 0.15 delta. The risk profile of the transaction is such that the trader may benefit somewhat on the short stock leg of the transaction should shares in the name slip in the near term. But, the profit and loss parameters of the position dictate substantially greater gains if Time Warner’s shares surge ahead of expiration day next month. If shares rally, gains on the long calls, which represent a far larger stake in the underlying than the 150,000 shares of which the investor is short, will trump losses realized on the short stock. The investor is well positioned to benefit nicely should the price of the underlying react as he predicts it will. Time Warner Cable’s reading of options implied volatility is up 5.1% on the session at 21.26% as of 1:30pm.

RVBD - Riverbed Technology, Inc. – Shares in Riverbed Technology increased as much as 4.0% this morning to secure an intraday- and new all-time high of $43.54. One big options player appears to be using call options in the name to position for the bullish momentum to continue through June expiration. It looks like the trader picked up 15,000 deep in-the-money calls at the June $39 strike for a hefty premium of $7.30 each, and sold the…
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Put Player Portends Pullback in Corning Shares

 Today’s tickers: GLW, EXPE, ODP & TSO

GLW - Corning Inc. – A massive put spread purchased on the glass maker this afternoon appears to be the work of an investor positioning for the price of the underlying stock to decline ahead of August 2011 expiration. Corning’s shares increased 0.55% this afternoon to arrive at $22.28 by 1:40pm in New York. The price of the underlying stock has climbed more than 51.6% since August 27, 2010, to touch a 52-week high of $23.43 just last Friday. The large bearish stance employed in Corning put options today is perhaps a sign that at least one player believes the next six months may not be as fruitful for GLW investors as the last six. The trader purchased 28,000 puts at the August $22 strike for a premium of $1.83 each, and sold the same number of puts at the lower August $18 strike at a premium of $0.56 apiece. Net premium required to buy the spread amounts to $1.27 per contract, thus positioning the investor to profit should Corning’s shares drop 7.0% from the current price of $22.28 to breach the effective breakeven point on the downside at $20.37 by August expiration day. Maximum potential profits of $2.73 pad the put player’s wallet in the event that shares in GLW plummet 19.2% to trade below $18.00 before the contracts expire in August. Corning’s shares last traded below $18.00 back on December 1, 2010.

EXPE - – Expedia, Inc. – Contrarian options traders are initiating bullish plays on the online travel company this morning in the face of a more than 18.25% decline in Expedia’s shares to an intraday low of $20.99. Bullish strategists established near- and long-term positions that suggest the firm’s earnings miss has been priced in to its shares. Some traders are betting the stock is unlikely to fall much further, while others are initiating outright bullish bets that Expedia’s shares will recover somewhat in the next few months. Shares in EXPE dropped after the company…
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Retail-Bear Initiates Put ‘Fly On XRT

 Today’s tickers: XRT, SM, AMD, MEE, EXPE, CTV & MYL

XRT - SPDR S&P Retail ETF – Pessimism on the retail ETF took the form of a put butterfly spread today, suggesting one strategist is prepared for the price of the underlying fund to decline by December expiration. Shares of the XRT, an exchange-traded fund designed to track the performance of the S&P Retail Select Industry Index, are up 0.95% this afternoon to stand at $43.75 as of 3:10 p.m. in New York trading. The XRT’s shares are higher today following reports that economists increased estimates for consumer purchases in the third quarter after retail sales rose more than expected in September. But, nearly all of the activity in XRT options took place in puts and implies a bearish slant on the fund today. The butterfly spread involved the purchase of 5,600 puts at the December $43 strike at a premium of $1.45 each [wing 1], the sale of 11,200 puts at the December $39 strike for a premium of $0.47 per contract [body], and the purchase of 5,600 puts at the lower December $35 strike at a premium of $0.19 apiece [wing 2]. Net premium paid to initiate the bearish spread amounts to $0.70 per contract, thus positioning the investor to make money if shares of the XRT fall 3.3% from the current price of $43.75 to breach the effective breakeven point at $42.30 by expiration day in December. Maximum potential profits of $3.30 per contract are available to the trader if the price of the underlying fund declines 10.85% to settle at $39.00 at expiration. The investor paid $0.70 per contract, but stands prepared to gain more than 4.7 times that amount, or $3.30 per contract, if the transaction comes good by December expiration.

SM - SM Energy Co. – Shares of the U.S. producer of oil and natural gas rose 4.05% today to $42.34 as of 3:25 p.m. The current rally may be an extension of gains realized last week on news the…
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Phil's Favorites

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

 

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

Markets know what has happened each time the yield curve has turned negative. The idea of a negative curve without a a recession would take some getting used to. Shutterstock

Courtesy of Mark Crosby, Monash University

Since President Trump tweeted about imposing new tariffs on China, global equity markets have gone into a tailspin.

Trump’s more recent announcement that the new tariffs would be ...



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Zero Hedge

Morgan Stanley: "The Global Economy Is Deteriorating Faster Than Offsetting Policy Action"

Courtesy of ZeroHedge View original post here.

Sunday Start, submitted by Jonathan Garner and James Lord of Morgan Stanley

As regular readers know, Morgan Stanley is pretty bearish on global risk assets. This applies to emerging markets (EM) too, where we've been calling for wider credit spreads, weaker EM currencies, particularly in Asia, and lower equity prices. However, not so long ago the narrative guiding investors ran something like this: The Fed was ahead of the curve, EM bond yields looked attractive in a world of negative interest rates and a US-China trade deal seemed within reach...



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The Technical Traders

Negative Yields Tell A Story Of Shifting Economic Leadership

Courtesy of Technical Traders

Negative yields are becoming common for many of the world’s most mature economies.  The process of extending negative yields within these economies suggests that safety is more important than returns and that central banks realize that growth and increases in GDP are more important than positive returns on capital.  In the current economic environment, this suggests that global capital investors are seeking out alternative solutions to adequately develop longer-term opportunities and to develop native growth prospects that don’t currently exist.

Our research team has been researching this phenomenon and how it relates to the continued “capital shift&rdq...



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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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:

 

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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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