Posts Tagged ‘EXPE’

Strangle Strategist Sees Range-Bound Shares at The Cheesecake Factory

Today’s tickers: CAKE, LVS, IYR, TEVA, EEM, S, CREE & EXPE

CAKE – The Cheesecake Factory, Inc. – One premium-hungry options strategist sold a strangle on the full-service dining restaurants operator this afternoon in the expectation that its shares are set to trade within a narrow range through October expiration. Cheesecake Factory’s shares fell 1.45% late in the session to trade at $25.38 by 3:35 pm ET. The investor sold 3,000 puts at the October $25 strike for premium of $1.05 apiece and sold 3,000 calls at the October $26 strike at a premium of $1.05 each in order to pocket gross premium of $2.10 per contract. Full retention of the premium received today occurs as long as shares of the underlying stock trade between $25.00 and $26.00 through October expiration. Wayward shifts in the price of CAKE’s shares could give this strangle-player a severe stomachache as losses start to build should shares rally above the upper breakeven price of $28.10, or if shares dip under the lower breakeven point at $22.90, ahead of expiration day in October.

LVS – Las Vegas Sands Corp. – Shares in casino resort operator Las Vegas Sands commenced the session in the red but rallied in afternoon trading to stand 1.05% higher on the day at $31.32 as of 3:45 pm ET. Earlier in the day shares increased as much as 1.5% to secure a new 52-week high of $31.46. One long-term bullish investor hoping to see continued appreciation in the price of the underlying stock established a covered call in the March 2011 contract. The trader sold 10,000 calls at the March 2011 $40 strike for premium of $1.73 per contract. The transaction had a delta of .30 and was tied to the purchase of LVS shares at $31.20 each. Premium received on the sale of the calls effectively reduces the price paid by the investor to get long the stock. The bullish player is poised to accumulate maximum potential gains of 35.7% on the run up in LVS shares from an effective purchase price of $29.47 to $40.00 if the calls land in-the-money at expiration and the underlying position is called away from the trader at that time.

IYR – iShares Dow Jones U.S. Real Estate Index ETF – The construction of a debit put spread on the IYR, an exchange-traded fund that corresponds to the Dow Jones U.S. Real Estate Index…
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Arena Pharmaceuticals Options in High Demand as Shares Rally to New 52-Week High

Today’s tickers: ARNA, EXPE, LPX & NLY

ARNA – Arena Pharmaceuticals, Inc. – Shares of the biotechnology firm surged 14.6% this morning to a new 52-week high of $8.00 inspiring options investors to establish near-term bullish stances on the stock as the battle royal between the firm and its competitors to get an obesity drug on the market continues to rage. Arena’s shares are currently up 7.90% to stand at $7.53 as of 12:35 pm ET. Investors positioning for continued upward movement in the price of the underlying shares picked up 1,900 now in-the-money calls at the August $7.0 strike for an average premium of $0.93 apiece. In-the-money call coveters make money if Arena’s shares are trading above the average breakeven price of $7.93 at expiration. Buying interest spread to the higher August $8.0 strike where bulls purchased approximately 2,600 calls for an average premium of $0.58 each. Arena’s shares must rally 13.95% over the current price of $7.53 in order for August $9.0 strike call buyers to start to accumulate profits above the breakeven point to the upside at $9.58 by expiration day in August. Other optimists paid an average premium of $0.27 per contract to take ownership of 1,000 calls at the August $9.0 strike. Traders long the higher-strike calls profit as long as ARNA’s shares jump 23.1% to surpass the breakeven price of $9.27 by August expiration. Options traders exchanged more than 46,900 calls on the stock by 12:42 pm ET. Approximately 2.35 calls changed hands on Arena for each single put option in action thus far in the trading session.

EXPE – Expedia, Inc. – Online travel company, Expedia, popped up on our ‘hot by options volume’ market scanner in the first half of the trading day due to near-term activity in both calls and puts. Expedia’s shares surged 9.5% to touch an intraday high of $23.08 on news the firm reported earning second-quarter net income of $0.44 a share, which exceeded the average analyst forecast of $0.42 a share, after the closing bell on Thursday evening. EXPE’s shares are currently up 7.40% on the day at $22.63 as of 12:50 pm ET. Bullish players hoping to see Expedia’s shares extend gains scooped up approximately 1,100 now in-the-money calls at the August $22.5 strike for an average premium of $0.95 each. Call buyers stand ready to profit should the largest online travel company’s shares rally another…
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Barrage of Bearish Plays Befall Airgas, Inc.

Today’s tickers: ARG, QSFT, VTR, MET, SPWRA, USO, JPM, BMY, ADI & EXPE

ARG – Airgas, Inc. – Options investors initiated diverse bearish strategies on the distributor of industrial, medical and specialty gases this afternoon with shares of the underlying stock lower by 1.75% to $61.73 as of 3:15 pm (ET). Pessimistic players are likely wary of potential sharp share price erosion should Air Products & Chemicals Inc., the industrial gases maker forging a hostile takeover of Airgas in a proposed $5.1 billion bid for the company, fail to ultimately close the deal. Maybe bearish options investors are taking a cue from Paul Huck, CFO at Air Products & Chemicals, who yesterday stated, “there is a large drop in the stock price awaiting this, should Air Products go away” because “If we go away, who else is going to show up and pay this?” Airgas’s share price, which is up roughly 39% since Air Products’ offer went public ahead of February 5, 2010, would likely come crashing down if for some reason Air Products walks away given the lack of other serious competing offers for ARG at this time. Bearish traders bracing for potential share price hemorrhaging purchased a debit put spread and sold calls in the July contract and enacted a ratio bearish risk reversal in the October contract. One investor purchased 2,925 puts at the July $55 strike for a premium of $1.50 each, and sold the same number of puts at the lower July $50 strike for $0.65 apiece. Net premium paid for the spread amounts to $0.85 per contract, thus yielding maximum potential profits of $4.15 each if Airgas shares decline 19% to breach the $50.00 level by expiration day. The sale of 5,000 calls at the July $65 strike for an average premium of $1.05 each may or may not be the work of the same investor. Open interest of 19,000+ calls at the July $65 strike implies the call seller could be closing out a previously established long stance on the stock. Otherwise, the responsible party expects to keep the $1.05 premium per contract received on the sale as long as shares of the underlying stock do not exceed $65.00 ahead of July expiration. Finally, one pessimistic individual populating the October contract sold 5,000 calls at the October $70 strike for a premium of $1.28 each in order to buy twice as many puts…
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Caterpillar Sees Sizeable Options Activity

Today’s tickers: CAT, EEM, FITB, VALE, SLM, EXPE, SNDK, SLM & YHOO

CAT – Caterpillar, Inc. – A long-term bullish play on the world’s largest maker of bulldozers and excavators proved highly profitable for one investor who banked hefty gains in the January 2010 contract this afternoon. Shares of CAT are currently up less than 0.5% to $59.80 on an upgrade to ‘neutral’ from ‘sell’ at Goldman Sachs. It appears the trader originally purchased 15,000 calls at the January 55 strike for 3.50 apiece, and 20,000 calls at the higher January 60 strike for 1.95 each, back on September 25, 2009. Today the investor sold the January 55 strike calls for 6.90 and the January 60 strike calls for 3.85 per contract. Net profits to the trader amount to $8.9 million. Elsewhere, it seems a large bullish call position was partially financed through the sale of put options. It looks like a chunk of 25,000 put options sold for 68 cents apiece at the December 50 strike at the same exact moment 40,000 call options were purchased for 1.50 each at the February 70 strike. The investor responsible for the trade likely expects shares of CAT to remain above $50.00 through expiration in December. This short sale partially offsets the cost of taking a massive bullish stance through expiration in February.

EEM – iShares MSCI Emerging Markets Index ETF – Shares of the emerging markets exchange-traded fund are trading more than 1% higher today to stand at the current price of $41.45. A 100,000-lot straddle caught our attention in the November contract this afternoon. It appears one investor has taken advantage of lower volatility on the EEM by purchasing a long straddle. The transaction involved the purchase of 50,000 calls at the November 41 strike for 1.53 apiece, and the purchase of 50,000 puts at the same strike for 1.21 each. The net cost of the trade amounts to 2.74 per contract. Volatility on the EEM has fallen to 27%, the lowest reading on the fund since August of 2008. Perhaps the long-straddle player expects volatility to jump higher before the options expire in November. The nature of the strategy is such that he will benefit given a sufficient shift in the price of the EEM in either direction. Profits are available if shares swing either above the breakeven point to the upside at $43.74, or if shares dip beneath…
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Brazilian Markets Beckon Option Bulls

Today’s tickers: EWZ, NOK, YUM, EXPE, CY & COF

EWZ – The exchange-traded fund was boosted higher today as Brazilian stocks gained the most in nearly two months. EWZ has experienced a 5.5% rally in shares to $52.80. Option traders populating the fund were seen making bullish plays to take advantage of today’s upward momentum. The near-term July 53 strike price had approximately 9,200 calls purchased for an average premium of 53 cents per contract. Individuals positioned at the July 53 strike are hoping the price of the underlying stock rallies 73 cents higher to breach the breakeven point on the trade at $53.53. One option trader selected the August 52 strike price to initiate a bullish reversal. It appears that this individual shed 6,500 puts at that strike for 2.60 each in order to purchase 6,500 calls for an average premium of 3.10 per contract. The net cost of the reversal amounts to 50 cents and yields a breakeven share price of $52.50. Reducing the price of getting long the calls by selling put options has dramatically reduced the breakeven point to the upside. The investor has already started to profit on the rally as the current market value of the stock is approximately 30 cents higher than the breakeven point. – iShares MSCI Brazil Index Fund

NOK – The world’s biggest maker of mobile phones has rallied higher by more than 6% to stand at $15.63 ahead of earnings scheduled for release tomorrow. The broad-based gains experienced by the market today have bolstered bullish traders who were seen picking up calls and selling puts on Nokia in the October contract. Put options at the out-of-the-money October 14 strike price were sold 2,700 times for 66 cents each while 3,200 puts were surrendered at the October 15 strike for an average premium of 1.05 apiece. Perhaps these investors do not feel the need for downside protection on the stock. The traders may retain the premiums received for writing the puts if shares of NOK remain higher than the strike prices described previously. They may also utilize the option premium to offset the cost of purchasing the shares in the case that shares slip and the puts land in-the-money. Just in-the-money puts were sold 2,400 times at the October 16 strike price for a premium of 1.58 per contract. Again, the full premium is retained if the puts
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Bears in the Butterfly Garden

Today’s tickers: MS, EXPE, FCX, VIX, XRT, GPS, XLP & WFC

MS – A massive, albeit lopsided, butterfly spread was established on MS today amid a more than 3.5% decline in shares to $25.19. The highly bearish play was initiated by an individual who expects to profit from significant declines in the price of the underlying by expiration in October. The butterfly spread defied typical parameters seen in the strategy. The body of the spread involved the sale of 20,000 puts at the October 21 strike price for 1.45 apiece. But, the lower wing, which would typically have half as many contracts as the body, also had 20,000 puts which were purchased for 79 cents each. Finally, the conventional upper wing at the October 25 strike had 10,000 puts bought for 3.19 per contract. The bottom-heavy wing with twice as many puts as the upper wing suggests that the trader is prepared for shares to slip beneath $18.00 by expiration. If shares slipped beneath the lower strike price, the trader, who is still net long 10,000 put options, would see the value of the puts appreciate. Perhaps this investor is banking on a renewal of financial calamities by the fall. – Morgan Stanley

EXPE – Bearish sentiment on the online travel company was apparent after one trader spawned a butterfly in the October contract. This individual probably doubts that the demand for travel and vacation accommodations is heading anywhere but south given rising unemployment statistics. Shares of EXPE have slipped along with the broader market today by 1.5% to $13.59. The butterfly spread was initiated through the sale of 22,000 puts at the October 10 strike price for a premium of 47 cents apiece. The body was flanked by the purchase of two wings. The higher October 15 strike had 11,000 puts purchased for 2.56 per contract and the lower October 7.5 strike also had 11,000 puts picked up for 18 cents apiece. We would like to point out that unlike traditional butterfly spreads, which have equidistant strikes, this butterfly was born with lopsided wings as the lower strike is just 2.5 below the central exercise price rather than 5 points. The investor has realized a net cost of 1.80 and will begin to amass profits beneath the breakeven point at $13.20. Maximum potential profits of 3.20 would be attained if shares of EXPE drop to $10.00 by
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Penn Gaming joins casino-movers – put options in action

Today’s tickers: PENN, CIT, EXPE, RF, XRT, FITB, UNH, UNG & MU

PENN – Shares of the gaming and racing company have lifted 8% to $30.79 amid gains experienced by a number of casino operators today. PENN edged onto our ‘hot by options volume’ market scanner after one investor initiated a put spread in the October contract. The spread was established through the purchase of 6,550 puts at the October 25 strike price for 2.02 each against the sale of 6,550 puts at the lower October 20 strike for a premium of 79 cents. The net cost of the transaction amounts to 1.23 and yields a maximum potential profit of 3.77 if shares declined to $20.00 by expiration. Such a trade could represent downside protection by an individual who is long the stock. Or, it could potentially represent a medium-term bearish position by a trader hoping to profit in the event of a 22% decline in shares through the breakeven point at $23.77 by expiration. – Penn National Gaming, Inc.

CIT – The bank holding company’s shares have rallied nearly 7% to $3.38 today, attracting some bullish option players seeking to benefit from further gains in the stock. Call-volume at the near-term June 5.0 strike price ballooned upward by more than 48,000 as investors purchased at least 37,200 contracts for an average premium of 23 cents each. The calls will begin to yield profits to investors if the underlying shares can increase 55% from the current price and surpass the breakeven point at $5.23 by expiration. Optimism spread to the July 5.0 strike where 5,500 calls were coveted for 40 cents apiece. Finally, the October 5.0 strike attracted some bullish action as well as some 2,000 calls appear to have been bought for 65 cents per contract. Option implied volatility climbed as high as 192% during the trading day up from Friday’s closing value of 151%. – CIT Group, Inc.

EXPE– Shares of the online travel company have climbed more than 6% to $15.88 amid renewed takeover chatter reported by one source. Option traders on EXPE have braced themselves for bullish movement in the stock as some 2,300 calls were purchased at the near-term June 17.5 strike price for an average premium of 35 cents per contract. In order to profit from a long-call position by expiration shares of Expedia must double today’s rally in order to breach the…
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Kimble Charting Solutions

DAX Index Hits Two 18-Year Support Lines, Creates Large Bullish Reversal

Courtesy of Chris Kimble

Has the DAX index from Germany experience a large decline of late? Yes, it has!

Has the decline broken long-term rising support lines? Not so far!

This chart looks at the DAX index on a monthly basis over the past 25-years. Over the past 6-years, it has traded sideways inside of the blue rectangle at (1).

The decline this year saw the DAX hit two 18-year rising support lines at (2) last month, where a large bullish reversal took place.

Until broken, important support remains in play at (2), which is bullish for this key index....



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Zero Hedge

Aaand Its Gone... The Biggest Support For Asset Prices

Courtesy of ZeroHedge View original post here.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Since the passage of “tax cuts,” in late 2017, the surge in corporate share buybacks has become a point of much debate. I previously wrote that stock buybacks were setting records over the past couple of years. Jeffery Marc...



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Phil's Favorites

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



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Biotech/COVID-19

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



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ValueWalk

Activists demand revamp of anti-redlining law

By Anna Peel. Originally published at ValueWalk.

Over 100 California Community Organizations and Leaders Call for Banking Regulators to Stop Planned Revamp of Anti-Redlining Law during COVID19 Crisis

Q1 2020 hedge fund letters, conferences and more

Worker, Housing, and Small Business advocates call on all resources to be dedicated to saving lives and responding to Coronavirus

San Francisco--Amongst an unprecedented public health crisis that threatens hundreds of thousands of lives, as small businesses are shuttered across California and the nation, and as millions file for...



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Chart School

The Big Short movie guides us to what is next for the stock market

Courtesy of Read the Ticker

There is nothing new in WallStreet, it is only the players that change. Sometimes a market player or an event gets ahead of the crowd and WallStreet has to play catch up.

Previous Post Dow 2020 Crash Watch Dow, Three strikes and your out!

It is important to understand major WallStreet players do not want to miss out on a money making moves.  







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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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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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