Splunk Options In Focus As Shares Move Higher; Call Volume Pops In Shipping Stocks
by Option Review - January 11th, 2013 2:23 pm
Today’s tickers: SPLK, GNK & DSX
SPLK - Splunk, Inc. – Options on software and data analysis company, Splunk, Inc., are far more active than usual this morning, with volume topping 4,600 contracts versus the stock’s average daily options volume of 670 contracts, as of 11:20 a.m. ET. Shares in the name are up better than 6% on the day to stand at $31.63, the highest level since October 2012. Traders positioning for shares in the name to extend gains in the near term snapped up January and February expiry call options. Upside calls with one full trading week remaining to expiration looked to the Jan. $30 and $35 strikes, purchasing around 500 and 220 contracts at those striking prices, at average premiums of $0.92 and $0.11 apiece, respectively. Bullish activity spread to the Feb. $35 strike where around 450 calls were purchased for an average premium of $0.41 each, preparing buyers to profit at February expiration in the event that Splunk shares rally another 12% to exceed the average breakeven price of $35.41. But, not all of the activity is in SPLK calls; trading traffic is also robust in the Jan. $30 strike put options. Traders exchanged around 1,300 puts at the Jan. $30 strike versus previously existing open interest of 446 contracts. Put players paid an average premium of $0.42 per contract, and may profit at expiration in the event that Splunk’s shares slip 6.5% from the current price to trade below $29.58.
GNK - Genco Shipping & Trading, Ltd. – Call options looking for shares in drybulk shipping company, Genco Shipping & Trading, Ltd., to rally substantially during the next five weeks were active this morning as shares in the name moved higher. The stock gained more than 4% during the first 15 minutes of the session, hitting an intraday high of $4.24. However, the stock was unable to hang onto earlier gains, and currently trades down 4% on the day at $3.91 as of 12:40 p.m. in New York. Traders positioning for Genco’s shares to extend the start-of-session rally purchased more than…
Long-Term Bull Populates Mead Johnson Nutrition Post-Earnings
by Option Review - January 27th, 2011 4:52 pm
Today’s tickers: MJN, ETFC, GNK & CAT
MJN - Mead Johnson Nutrition Co. – The global provider of pediatric nutrition popped up on our scanners after long-dated call and put options changed hands in the January 2012 contract. Shares in Mead Johnson are down slightly by 0.40% as of 12:30pm to stand at $59.78. The Glenview, IL-based firm reported fourth-quarter earnings of $0.57 a share before the market opened, beating the average forecast by one penny, but revenues for the quarter came in at $803.7 million, which missed estimates of $808.0 million. It looks like one investor is positioning for Mead Johnson’s shares to increase substantially ahead of January 2012 expiration. The investor appears to have sold 1,900 puts at the January 2012 $50 strike at a premium of $2.68 each, in order to buy the same number of call options at the higher January 2012 $65 strike for a premium of $3.58 apiece. The net cost of the bullish risk reversal amounts to $0.90 per contract. Thus, the investor stands ready to make money should shares in MJN rally 10.2% over the current price of $59.78 to exceed the effective breakeven price of $65.90 by expiration day in one year’s time. Options implied volatility on the stock is down 16.4% at 26.00% in early afternoon trade.
ETFC - E*Trade Financial Corp. – Shares in the provider of online brokerage and other financial services rallied as much as 6.7% this morning to secure an intraday high of $16.85 despite a weaker-than-expected earnings report Wednesday evening. Analysts, on average, were expecting ETFC to earn $0.04 a share, but the fourth-largest U.S. retail brokerage said it lost $0.11 a share in the fourth quarter. The earnings miss has not stymied today’s rally in the price of the underlying shares, but traders are favoring…
Wild Weekly Wrap-Up – August in Retrospect
by phil - August 29th, 2009 8:28 am
It has been a crazy few weeks!
I went back over our Long Shots list from August 9th, thinking all our picks must be doing great but really only C, with a 67% gain, is really outperforming. Long spreads on UYG and BHI are on target for nice gains but haven't moved much. Looking at our original picks in Pharmboys Phavorites from the same week, GSK is on track and up nicely already, our AZN cover is up 45% and MRK flew up 19% already. On the riskier Biotech side, ARIA's stock is up 16% and our spreads are all performing well, ONTY has been flat, OGXI is up 33% and the Jan $17.50s are up a rockin' 63% with that "cautious" spread up a surprising 75% already.
SPPI had a wild ride (as we predicted with TSCM's failed assassination attempt) and the buy/write is already up 24%, the Feb vertical is up 50% and the naked Jan put sale is up 27% and our Feb hedge play is right on track so all good there and a fine example of how following Cramer and his lackeys and and doing the opposite of what they say can be very profitable! Congrats to Pharmboy for a very fine set of picks, proving once again that there is room for research and fundamentals - not a single loser in the bunch in a choppy market! It was very timely as I had mentioned just that week in my interview with AOL Finance that XLV was my favorite sector and our IHI pick of 8/10 is up 28% on the naked Feb $45 put sale while the Feb $45 calls have already jumped 16%. It was a great call as IHI outperformed XLV and all our major indexes.
So our energy service pick (BHI) and overall financial pick (UYG) have not done much in 3 weeks and those were our leading sectors into my call to cash out our exposed long calls on Aug 13th, ahead of expirations. The Dow was at 9,400 on that day and now, a bit more than 2 weeks later, we've gained another 144 points but to listen to the MSM, you would think you are missing the rally of the century the past couple of weeks. This is one of the reasons I've gotten a bit more cynical about the…