Posts Tagged ‘JACK’

XLF Put Options In Play As Shares Slip

Today’s tickers: XLF, JACK & SNDK

XLF - Financial Select Sector SPDR ETF – Financials joined the broad market breather today, extending declines spurred by Tuesday’s FOMC minutes, and exacerbated first by a weak bond auction in Spain, and next by the lower-than-expected ISM non-manufacturing number. The XLF is off its lows of the session, but remains down 1.7% at $15.56 as of 1:30 p.m. in New York. The dip in financials today appears to have sparked a rush for downside protection, perhaps as some strategists seek to protect the double-digit rally in the sector since the start of the New Year. The XLF is up 17.0% year-to-date even with today’s decline, and it seems some traders are snapping up put options on the ETF to brace for potential continued bearish movement in the price of the underlying. Options players exchanged more than 55,000 puts at the May $15 strike against open interest of 18,287 contracts. It looks like nearly all of the puts were purchased for an average premium of $0.29 apiece, with the single largest trade printing 29,894 contracts in the first hour of the session. The put options yield profits – or downside protection – in the event that XLF shares drop 5.5% to breach the average breakeven price of $14.71 at expiration next month.

JACK - Jack in the Box Inc. – A large block of call options in play on Jack in the Box appears to be one part of a bearish stock and options combination strategy that pays off if shares in the operator of Jack in the Box and Qdoba Mexican Grill restaurants pull back. JACK’s shares are down 2.6% at $23.19 as of 12:05 p.m. in New York. It looks like one trader purchased 6,000 calls at the Sep. $25 strike…
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LyondellBasell Bulls Dabble in Chemical Maker’s Call Options

Today’s tickers: LYB, EEM, JACK & MWW

LYB - LyondellBasell Industries NV – Two sizable bullish options trades on the chemical manufacturer indicate strategists expect shares in LyondellBasell Industries to rise significantly over the next four months. Shares in the Rotterdam-based company increased as much as 2.9% today to secure an intraday high of $39.22 on a positive note from analysts at Morgan Stanley. A ratio call spread in the September contract was one of the two bullish plays initiated on LYB during the first half of the session. The investor responsible for the transaction purchased 6,500 calls at the September $40 strike for a premium of $2.90 each, and sold 13,000 calls up at the September $46 strike at a premium of $0.95 apiece. The net cost of putting on the spread amounts to just $0.10 per contract. Profits are available on the position if shares in the chemical company rally another 2.2% over today’s high of $39.22 to surpass the average breakeven price of $40.10 by expiration day in September. Maximum potential profits of $5.90 per contract pad the investor’s wallet in the event that shares surge 17.3% to settle at $46.00 at expiration. Shares in LYB traded as high as $48.12 at the beginning of May, the highest since the company’s emergence from Chapter 11 bankruptcy protection in 2010. The short stance in twice as many September $46 strike calls lowers the net cost of the trade substantially, but also adds an element of risk for the investor. Losses on the uncovered calls kick in if the price of the underlying stock jumps 32.3% in the next several months to surpass the upper breakeven price of $51.90 at expiration. Next, it appears a different bullish strategist purchased 10,000 calls at the June $39 strike for a premium of $1.80 each, and sold the same number of calls out at the September $45 strike for an average premium of $1.275 a-pop. The trader paid a net premium of $0.525 per contract…
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Baidu Options Abuzz on Reports of Agreement with Facebook

Today’s tickers: BIDU, PCS, JACK & CVC

BIDU - Baidu, Inc. – Frenzied options trading ensued at Baidu today on reports the owner of China’s most-used search engine signed an agreement with Facebook Inc. to set up a social networking website in China. BIDU’s shares rallied nearly 5.0% at the start of the session to touch an intraday- and new all-time high of $148.92. Investors are favoring call options on the stock, trading more than 2.8 calls for each single put option in play today. Options expiring this Friday are the most heavily populated in early-afternoon trade, with two-way trading traffic evident at most strikes. Volume is heaviest at the April $150 strike, with more than 15,740 calls having changed hands there as of 12:40pm on previously existing open interest of 5,441 contracts. Call volume is substantial at the in-the-money April $145 and April $155 strikes today, as well. Investors have traded upwards of 11,100 calls at each of those strikes this afternoon. Options expiring in May are active, and provide traders the opportunity to take positions on the stock in advance of the company’s first-quarter earnings report on April 27, 2011. Medium-term optimists scooped up call options at sky-high strikes in anticipation of continued bullish movement in Baidu’s shares through June expiration. Investors picked up more than 1,100 calls as high as the June $190 strike for an average premium of $0.95 a-pop. Call buyers at this strike make money if shares in BIDU spike 28.2% higher in the next couple of months to top the average breakeven price of $190.95 by expiration day in June. Options implied volatility on the Beijing-based company increased 11.2% to 47.03% as of 1:00pm in New York, with overall options volume on the stock exceeding 99,930 contracts.

PCS - MetroPCS Communications, Inc. – The…
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Ford Rally Fuels Bullish Options Activity

Today’s tickers: F, EEM, DELL, UPS, IYR, JACK, WFC, CLX, SKX & LNC

F – Ford Motor Co. – The automobile manufacturer’s shares are once again trading at a new 52-week high after rallying 4.00% today to $14.02. Upward movement in the price of the underlying stock inspired bullish options trading activity. One investor initiated a plain-vanilla debit call spread to position for continued share price appreciation through expiration in September. The trader bought 5,000 calls at the September $15 strike for a premium of $1.03 per contract, and sold the same number of calls at the higher September $17.5 strike for $0.40 each. The investor paid a net $0.63 per contract for the spread, but could gain as much as $1.87 per contract if Ford’s shares surge 25% over the current price to $17.50 by expiration day. Nearer-term put activity clashes with the bullish move described in the September contract. It looks like investors purchased at least 18,600 put options at the April $13 strike for an average premium of $0.27 apiece. Perhaps put buyers are long shares of the underlying stock and are merely picking up cheap downside protection. But, it could also be the case that traders are buying the puts outright because they expect Ford’s shares to decline ahead of next month’s expiration day. If the latter is true, put-buyers amass profits if shares trade beneath the effective breakeven point on the puts at $12.73 by expiration.

EEM – iShares MSCI Emerging Markets Index ETF – Shares of the EEM, an exchange-traded fund that mirrors the price and yield performance of the MSCI Emerging Markets index, rose 1.55% during the session to $42.24. Despite the move up in share price, one investor employed a total of 60,000 option contracts on the fund to establish a bearish risk reversal in the January 2011 contract. It appears the options player shed 30,000 calls at the January 2011 $48 strike for a premium of $1.60 apiece in order to partially finance the purchase of 30,000 puts at the January 2011 $38 strike for $2.88 each. The net cost of the reversal amounts to $1.28 per contract. The massive size of the position may mean the trader is currently long an equivalent number of underlying shares of the fund. If this is the case, the transaction provides downside protection on that position should the EEM’s share price erode ahead of…
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Just Another Manic Monday – Retail Edition

[Growth and Deflation chart]Good morning! 

Japan had a huge GDP beat (+1.2% for the Q, 4.8% annualized)) and they leaked it early (to oil executives!) but, strangely, deflation is accelerating at the same time.  That’s great news for stimulus watchers as the government can continue to pump money into the economy, even while it’s growing and, of course, the carry trade can continue.

Despite the robust third-quarter report, Japanese officials said they were still concerned about the economy’s strength going forward, and didn’t intend to pull back plans for further spending to ensure continued growth.

"There is no change in the severe condition of the country’s economy," Naoto Kan, the deputy prime minister, told reporters after the report’s release. "We are concerned about whether the economy falls into a deflationary situation," he added.

The domestic demand deflator — a measure of changes in prices of goods and services, excluding exports and imports — plunged 2.6%, the fastest pace since 1958. It was the third straight quarter of falling prices.

Another sign of concern in the report: The contribution of private consumer spending to growth slipped in the third quarter, suggesting measures to convert Japan from export-led growth to domestic-demand-led growth were facing limits. In the third quarter, private consumer spending, rose 0.7%, compared with a revised 1% climb in the second quarter.

It’s all stimulus but there’s no sign stimulus is stopping so party on markets.  Japan also got a huge benefit from the Chinese auto sales – more stimulus!  The Nikkei itself isn’t thrilled and is up just 0.25%, barely hitting Friday’s high on a stick-save into the close but that didn't stopping the futures from jumping up more than half a point and gold from hitting $1,130.  I sent out an Alert to Members at 2:24 this morning saying:

"Once the Nikkei closes (2am EST) the Hang Seng will have an hour to themselves and that should top out our futures (the Hang Seng is up at 22,900 (+1.5%).  The shorting move on gold futures is to short them as they cross below $1,130 with zero tolerance for holding gold above that line.  The same can be done with the S&P futures at 1,100, the Dow at 10,316 and the Nas at 1,800 and you can even use the 2 out of 4 rule to
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Zero Hedge

The Liquidity Crisis Is Quickly Becoming A Global Solvency Crisis As FRA/OIS, Euribor Soar

Courtesy of ZeroHedge View original post here.

One month after turmoil was unleashed on capital markets, when the combination of the Saudi oil price war and the sweeping impact of the coronavirus pandemic finally hit developed nations, what was until now mostly a liquidity crisis is starting to become a solvency crisis as more companies realize they will lack the cash flow to sustain operations and fund debt obligations.

As Bloomberg's Laura Cooper writes, cash-strapped companies are finding little relief from stimulus measures, and from Europe to the US, cash in hand has been hard to come by even...



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The Technical Traders

Adaptive Fibonacci Suggests Much Lower Prices Yet To Come - Part I

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system suggests a much deeper price move is in the works and the current price rally will likely end near resistance levels identified by the Adaptive Fibonacci Price Modeling system.  We are posting this research post for friends and followers to help them understand the true structure of price and to allow them to prepare for what we believe will become a much deeper downside price move in the future.

Fibonacci Price Theory teaches us that price moves in waves within up and down price cycles. The recent peak in price, near February 25, 2020, has resulted in a very deep -36% price collapse in the S&P 500 (ES) recently. This dow...



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Phil's Favorites

Striking Amazon, Instacart employees reveal how a basic economic principle could derail our ability to combat the coronavirus

 

Striking Amazon, Instacart employees reveal how a basic economic principle could derail our ability to combat the coronavirus

Samuel Diaz, a delivery worker for Amazon Prime, loads his vehicle with groceries from Whole Foods in Miami. AP Photo/Lynne Sladky

Leigh Osofsky, University of North Carolina at Chapel Hill

A series of recent protests by the workers preparing and delivering our essential foods and other goods highlights a key risk to our ability to combat the coronavirus.

Some employees at an Amazon warehouse and Instacart “shoppers” ...



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Biotech/COVID-19

In the rush to innovate for COVID-19 drugs, sound science is still essential

 

In the rush to innovate for COVID-19 drugs, sound science is still essential

Employees work on the production line of chloroquine phosphate, resumed after a 15-year break, in a pharmaceutical company in Nantong city in east China’s Jiangsu province Thursday, Feb. 27, 2020. Feature China/Barcroft Media via Getty Images

Christopher Robertson, University of Arizona; Alison Bateman-House, ...



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ValueWalk

Coronavirus symptoms, causes, prevention and cure

By Jacob Wolinsky. Originally published at ValueWalk.

The best case situation for Coronavirus or COVID-19 is that in a few weeks it dies down and things get back to normal. However, we must entertain the possibility of a far more frightening scenario.

Warmer weather may not hurt coronavirus

April 8, 2020 Update: The number of coronavirus cases in New York State has now topped the number in Italy. New York Gov. Andrew Cuomo said 779 people died of COVID-19 in the state in a single day, marking the highest one-day death total from the virus. More than 6,200 people have died of the virus in New York, which Cuomo said is double the number of people who died there in the Sept. 11, 2001 terrorist attacks.

Many experts have been counting on the warmer months providing some relief from the coronavirus. However, a National Academies of Sciences panel told the White House t...



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Kimble Charting Solutions

Market Crash Reversal Patterns "Experiment" With History!

Courtesy of Chris Kimble

S&P 500 Index versus “Inverted” 30 Year Yield “monthly” Chart

Stocks and treasury bond yields had a wild (and scary) month of March as the financial markets crashed to new lows.

In today’s chart, we highlight this by looking at long-term “monthly” chart of the S&P 500 Index versus an “inverted” 30 Year US Treasury Bond Yield.

Note that inverting charts offers a different perspective and reduces bias. For more on this, ...



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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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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.