Bearish Options Change Hands On Corrections Corp. Of America
by Option Review - February 4th, 2013 1:15 pm
Today’s tickers: CXW, HUM & RRGB
CXW - Corrections Corporation of America – Put options in play on prison operator, Corrections Corporation of America, this morning indicates one or more traders may be bracing for shares in the name to pullback sharply in the near term. The largest U.S. owner and operator of privatized correctional and detention facilities likely reports fourth-quarter earnings next week. The stock today trades 1.0% lower to stand at $37.75 as of midday in New York, on a down day for U.S. stocks. The Mar. $34 strike puts are the most active options changing hands on CXW today, with 5,000 puts trading against open interest of 390 contracts. It looks like most of the $34 puts were purchased in the early going for an average premium of $0.48 apiece. Put buyers stand ready to profit at March expiration should shares in Corrections Corp. of America decline 11% from the current price of $37.75 to breach the average breakeven point on the downside at $33.54. Shares in CXW, up 60% since this time last year, last traded below $33.54 at the end of November.
HUM - Humana – Shares in the Louisville, Kentucky-based health care company are up better than 4.7% at $78.90 this afternoon after the company posted better-than-expected fourth-quarter earnings ahead of the opening bell. Options traders positioning for shares in Humana to extend gains during the next six months snapped up August expiry calls on the stock. The August $82.5 strike calls changed hands upwards of 790 times during the first half of the session, with the bulk of the contracts purchased for an average premium of $3.40 each. Bulls long the $82.5 strike calls stand ready to profit at expiration should HUM’s shares rally another 9% to exceed the average breakeven price of $85.90. Meanwhile, traders positioning for Humana’s shares to potentially hit a fresh 52-week high by expiration in six months picked up roughly 360 calls at the Aug. $95 strike for an average premium of $0.75 apiece. Traders long the $95 strike call options make money if…
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Humana Call Options Fly Off the Shelves as Shares Hit New 2-Year High
by Option Review - October 13th, 2010 4:54 pm
Today’s tickers: HUM, SIGA, ALXN, CBS, REP & GAP
HUM - Humana Inc. – Call options on the health benefits company are in high demand this afternoon with shares of the underlying stock trading higher by 3.15% to arrive at $53.85 in the final hour of the session. Shares rallied as much as 3.965% earlier today to secure a new 2-year high of $54.27. An analyst at Wedbush said earlier that health insurers may wind up reporting a better third quarter than previously forecast. Additionally, she mentioned Humana is her top pick for a health insurer that’s most likely to top Wall Street estimates in the third quarter. Humana is scheduled to report results ahead of the opening bell on November 1, 2010. Activity in November contract calls indicates one big player sees today’s rally in Humana’s shares extending through to expiration day next month, post-earnings. It looks like the bullish investor purchased 14,176 calls outright at the November $55 strike for an average premium of $1.425 per contract. The call buyer makes money if HUM’s shares rally another 4.8% over the current price of $53.85 to surpass the average breakeven point to the upside at $56.425 ahead of expiration. Options implied volatility on HUM is up 11.6% to arrive at 32.71% with 35 minutes remaining in the session.
SIGA - SIGA Technologies, Inc. – Shares of the bio-defense company jumped 52.7% today to an all time high of $13.07 on reports the firm won a U.S. government contract worth up to $2.8 billion to supply its smallpox antiviral drug. The stock is currently up 42.75% at $12.22 heading into the close. Options traders initiated bullish stances on the stock right out of the gate this morning in order to position for continued appreciation in the price of SIGA’s shares. Investors picked up approximately 1,200 in-the-money calls at the October $12 strike for an average premium of $0.44 apiece, and are poised to profit should shares exceed $12.44 through expiration on Friday. Nearly 1,000 calls were…
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Sabrient Select Opportunity Virtual Portfolio
by Sabrient - June 22nd, 2010 2:41 am
Sample one of Sabrient’s premium products, Sabrient Select Opportunity Virtual Portfolio.
Courtesy of Sabrient
This Sabrient Select Opportunity Virtual Portfolio is a high-performance, proprietary product for sophisticated active traders, active virtual portfolio managers or hedge fund managers. Our Lead Trader publishes a weekly fundamentals-based,quantitative Watch List of the top Long and Short candidates. Then he overlays a technical entry/exit trigger on top of this Watch List. Each day, he identifies those stocks that have triggered their planned technical entry or exit signals, and sends an alert to the client for appropriate action.
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Sabrient Select Opportunity Portfolio
by ilene - June 16th, 2010 8:56 pm
This is a follow up to Sabrient’s Select Opportunity Portfolio update a couple days ago. As part of its premium service, Sabrient sends out notices when buying a particular stock on the buy list. Today, HUM is being added to the Select Opportunity Portfolio. – Ilene
Sabrient Select Opportunity Portfolio
June 16, 2010 – Buy HUM
We are going to buy HUM at the current price level near the close today, which is $48.75 as I write this.
Humana is a health and supplemental benefits company. It is rated STRONG BUY by the Sabrient Ratings Algorithm, and it carries an Outlook score of 99, a Value Score of 70, and a Growth Score of 85. It has been recovering nicely lately to resume its year-long uptrend.
I’ll keep a mental stop below the 20-day EMA around $46.9.
Best Regards,
Scott Martindale
Senior Managing Director
Visit Sabrient to learn more here.
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Mega Earnings Monday – 1,000 Reports This Week!
by phil - April 26th, 2010 8:21 am
What a crazy week this is going to be!
Pre-Market we're hearing from BLK, CAT (are we building stuff?), EXP, HTZ, HUM, LO, TUES and TZOO and later we will hear from BSX, CHH, OLN, RSH, RCII, TXN (major) and my "friendbuddypal" Cramer's TSCM (if they are not delayed). Revenues at The Street have crept back up this year in a recovery that pretty much mirrors the market. The company does pay a nice 2.6% dividend, which works out to a nice $200,000 bonus on Jimmy's 2.1M shares (6.7% of the company) so you know that bonus will be a priority for the company. Cramer was BUYBUYBUYing his own stock at $2.41 in January but sadly they have no options to hedge… They might make a nice pick-up after earnings if they disappoint and head back to $3 or less.
I'm full of useful information on hundreds of stocks right now because I've been researching our new Buy List but I'm not pleased with what I've been seeing so far and this week's tidal wave of earnings, with 1,000 companies reporting means we're in no hurry to dip our toes in the water. I told Members this morning I should probably be working on a Sell List, as it's much easier to find companies I want to short than ones I want to buy. Even in the Weekly Wrap-Up, we featured a 1,900% downside hedge on the Russell to offset the 566% plays and other bullish plays we've begun to reluctantly take, just so we don't feel too silly in this runaway market.
If you have never watched Jim Cramer discussing the sleazy, manipulative ways he used to game the markets – you really must take 10 minutes and watch this video, where Jim explains how any immoral bastard with $10M can yank the entire futures market around at will. He prefaces one of his favorite strategies with "this is blatantly illegal but.. I think it's really important… these are things you MUST do on a day like today and if you are not doing it, maybe you shouldn't be in the game." Are you playing the game or are you being played?
The biggest game ever played may be unwinding as we speak. Bloomberg reports that foreign-exchange profits from carry trades are disappearing as differences in central…
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Pessimism Apparent as Goldman-Bears Play with Put Options
by Option Review - April 20th, 2010 5:07 pm
Today’s tickers: GS, MU, PEG, CX, XRX, IYT, EEM, HOG, HUM & ALL
GS – Goldman Sachs Group, Inc. – Posturing in out-of-the-money put options on Goldman Sachs today indicates some investors expect the investment banking firm’s share price could erode substantially ahead of May expiration. Goldman’s shares slipped 1.5% during the trading session to stand at $160.94 as of 2:30 pm (ET). One pessimistic player invested in a debit put spread in order to position for continued bearish movement in the price of the underlying stock through expiration next month. The trader picked up approximately 11,700 puts at the May $145 strike for an average premium of $1.91 each, and sold the same number of puts at the lower May $120 strike for $0.16 apiece. Net premium paid for the put transaction amounts to $1.75 per contract. The trader makes money if Goldman’s shares fall 11% to breach the effective breakeven point to the downside at $143.25. Maximum available profits of $23.25 per contract are available to the options player should the financial services firm’s share price plummet 25% to $120.00 ahead of expiration day in May. Other bearish players engaged in plain-vanilla put buying at the June $150 strike where at least 3,600 put contracts were picked up for an average premium of $4.73 each. Put-buyers at this strike stand ready to accrue profits if Goldman Sachs’ share price slips 9.75% lower to breach the average breakeven point at $145.27 by June expiration.
MU – Micron Technology Inc. – A large-volume short strangle play employed on the manufacturer of semiconductor devices today suggests one big options player expects Micron’s shares to trade within a specified range through expiration in October. Micron Technology’s shares are up 0.10% to $10.81 as of 2:50 pm (ET). It looks like one trader sold approximately 24,000 puts at the October $9.0 strike for a premium of $0.73 each, in combination with the sale of about the same number of calls at the higher October $12 strike for $0.98 apiece. Gross premium pocketed by the strangle-strategist amounts to $1.71 per contract. The investor keeps the full amount of premium received today as long as Micron’s shares trade within the boundaries of the strike prices described through expiration day. Short positions assumed in both call and put options expose the trader to losses in the event that Micron’s shares rally above the upper breakeven price…
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Monday Market Movement – Pattern Recognition
by phil - November 2nd, 2009 8:24 am
Here’s a scary chart pattern for you from our Chart School:
Elliot Wave Trends points out that the S&P has fallen into a fractal patten that may be repeating the behavior of the great drop of ’08, right here, right now. Of course patterns do SEEM to repeat themselves all the time – until they don’t – but it will be interesting this week and next to see if we follow-through with a flatline, followed by a drop to 1,000 from which we falsely back to 1,050 and then plunge to our doom as Santa foresakes us and we run all the way back down to our lows.
That’s where they lose me. Charts are fun and all but I see no basis for going back to our lows as our lows were ridiculous and caused by panic-selling in a doomsday scenario. Hard to imagine things will fall apart that badly between now and Jan earnings although I do believe we will have a rough time — just not that rough!
Barron’s surveyed Money Managers this weekend and they don’t seem to think things will be rough at all. 52% of those surveyed think there is NO WAY we will have a double dip recession. 76% believe that the decline in corporate profits has ended and 68% believe our GDP wil grow more than 2.5% in Q4 while just 10% believe it is possible for commodity pricing to fall in the next 6 months. You know what they say about when everyone is on the same side of a bet of course!
These are the people we give our money to – the biggest and "brightest" of hedge fund managers who control over $1Tn of assets under management. Favorite stocks in the group are: MSFT, ABT, BAC, BRK.A, CVS, GE, GS, LEG and QCOM. Stocks that are considered overvalued are: AIG, AAPL, GOOG, CAT, AMZN, C, GE, GMCR, VZ and YHOO. Ony 7% think Asian stocks are heading lowed, just 1% less than 8% who feel oil is going down; 92% don’t feel oil will go down.
Everybody likes Tech (just 0.9% think it will be the worst performing sector) and nobody likes the Financials (22.5% think it will be the worst performing sector) followed by Consumer Cyclicals (20.7%) and, oddly, Utilities (15.3%). The sectors picked as the best performers for the next 6-12 months are Tech (18.9%), Energy (17.1%) and Health Care (17.1%). Only…
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Lexmark Call Buyers Out In Force
by Option Review - July 14th, 2009 4:16 pm
Today’s tickers: LXK, EEM, MT, VIX, HUM, IPI, MIR & UNH
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China Fund Sees Brisk Two-Way Action
by phil - June 17th, 2009 4:36 pm
Today’s tickers: FXI, KRE, WFC, FDX, JWN, HUM, ALL & MSFT
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PepsiCo sees large put volume
by Option Review - April 28th, 2009 5:08 pm
Today’s tickers: PEP, XLY, ITT, PFE, HUM, HSY, ERTS & NTRS
PEP PepsiCo, Inc. – The global beverage, snack, and food company’s shares have rallied by more than 1% to stand at $49.75. PEP popped onto our ‘most active by options volume’ market scanner after a large volume bullish transaction was observed in the October contract. One optimistic individual targeted the October 50 strike price and sold 30,000 puts for a premium of 4.20 apiece out of some 35,000 puts sold in total at the strike. There is no existing open interest at the October 50 strike, and thus, the trade represents short selling in anticipation that shares will rise beyond $50.00 by expiration in October. This could also represent a covered put strategy (short stock and sold puts) indicating the investor’s expectation that shares might fall further. At expiration if shares are below the strike the investor would have stock put to him at $50.00 but the premium from the puts effectively reduces that price to $45.80.
XLY Consumer Discretionary Select Sector SPDR – Shares of the ETF have risen by about 0.5% to $22.60 as the ticker edged onto our ‘most active by option volume’ market scanner this afternoon due to one investor who established a ratio put spread in the June contract. It appears that this trader is looking for downside protection on the fund and so bought 12,500 puts at the June 22 strike price for 1.30 apiece spread against the sale of 25,000 puts for 65 cents at the June 20 strike price. The put spread was initiated at no cost the trader given the premium of the respective puts. If shares should decline all the way to $20.00 by expiration this individual will have reeled in the maximum profit of 2.00 possible on the trade. Profits will begin to amass to the downside at any share price below $22.00. Despite carrying a net short put position below a share price of $20.00 losses would not accrue unless shares slipped beneath $18.00, but would rise penny-for-penny thereafter.
ITT ITT Corporation – Shares of the multi-industry company engaged in the design and manufacture of engineered products have remained relatively flat for the day and currently stand at $40.73. ITT appeared on our ‘hot by options volume’ market scanner after one investor initiated a sold straddle in the July contract. It appears that the straddle was…
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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...
Ilene is editor and affiliate program
coordinator for PSW.