Posts Tagged ‘JAVA’

CAT-Bears Brace for Rocky Start to 2010

Today’s tickers: CAT, MS, UUP, STI, WFC, MCO, M, ROK, BBY, JAVA & HMY

CAT – Caterpillar, Inc. – Bearish option traders are bracing for potential CAT-share price erosion through expiration in February 2010. Shares edged nearly 0.75% lower in late afternoon trading to stand at $57.94. One pessimist purchased a put spread to prepare for potential declines. The transaction involved the purchase of roughly 7,000 puts at the February 55 strike for a premium of 2.35 apiece, marked against the sale of 7,000 puts at the lower February 35 strike for 49 cents premium each. The net cost of the trade amounts to 1.86 per contract. The investor responsible for the spread probably holds a long position in the underlying. Under this assumption, the trader has established downside protection, which kicks in if Caterpillar’s shares fall beneath the breakeven price of $53.14 by expiration day in February.

MS – Morgan Stanley – Analysts at Barclays Capital slashed fourth-quarter earnings estimates for Morgan Stanley to 40 cents from 90 cents today. Perhaps the bearish options activity observed on MS during the trading session was partly inspired by the significant profit-forecast revision at Barclays. Either way, investors populating Morgan Stanley’s January 2010 contract appear pretty pessimistic on the second-largest U.S. securities firm. Traders threw in the towel on MS by shedding nearly 20,000 calls at the January 31 strike for an average premium of 75 cents apiece. Some investors may be closing out previously established long call positions. Analysis of the existing open interest at that strike suggests traders are likely cutting their losses by selling the calls today. Investors abandoning bullish bets do not paint a rosy picture of where MS’s share price may settle during the first weeks of 2010.

UUP – PowerShares DB US Dollar index Bull Fund – The U.S. dollar is brimming with confidence on the first of a two-day FOMC meet in Washington and while investors are not expecting any signs of a policy change, there is certainly a firmer tone underlying the dollar in the past 72 hours or so. Option traders placed extremely bullish bets using call options on the bullish dollar index fund, whose shares currently stand 0.9% higher on the day at $22.82. Investors bought a huge chunk of 100,000 long-dated options reserving buying rights over the dollar at a fixed $24.00 before the contract expires in January 2011. That leaves…
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AAPL-Bull Buys Call Spread

Today’s tickers: AAPL, GLD, XLU, AEP, CI, CHK, XEL, OSK, LLL, JAVA & BSX

AAPL – Apple, Inc. – A long-term bullish play on the iPod manufacturer suggests the price of the stock could skyrocket by July 2010. Apple’s shares increased more than 1% during the session to $196.96. It looks like one trader initiated a call spread in the July contract to position for a significant jump in the price of the underlying in the next seven months. The investor purchased 3,000 calls at the July 220 strike for a premium of 13.60 apiece, and sold the same number of calls at the higher July 250 strike for about 6.18 each. The net cost of the bullish play amounts to 7.42 per contract. AAPL’s shares must surge 15.5% from the current price in order to reach the breakeven point on the trade at $227.42. Maximum potential profits of 22.58 per contract are available to the investor if the stock jumps 27% to $250.00 by expiration in July.

GLD – SPDR Gold Trust ETF – A bullish risk reversal on the gold ETF today points to a rebound in gold bullion prices by expiration in February 2010. Shares of the GLD added nearly 1% during the trading day to stand at $110.23. One trader sold 9,650 puts at the February 110 strike for 4.70 each in order to partially finance the purchase of 9,650 calls at the same strike for 4.90 apiece. The net cost of the reversal amounts to just 20 cents per contract. Profits amass on the transaction if shares of the fund rally through the breakeven price of $110.20 by expiration day in February 2010.

XLU – SPDR Utilities Select Sector ETF – Shares of the exchange-traded fund comprised of common stocks of companies from the electric utilities, multi-utilities, independent power producers, energy traders and gas utility industries, increased 0.75% during the trading day to a new 52-week high of $32.08. The fresh high for the fund perhaps inspired the bullish options activity we observed on the XLU today. One investor banked profits on a previously established long call position in the January 2010 contract. The trader originally bought 5,000 calls at the January 29 strike for a premium of 92 cents apiece back on November 6, 2009, when shares were at $28.90. The investor sold the calls today for 2.95 apiece and took in net profits…
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Bearish Risk Reversal Anchored in Royal Caribbean Cruises

Today’s tickers: RCL, GE, YHOO, XLF, X, FCX, AIG, CF, JAVA & UAUA

RCL – Royal Caribbean Cruises Ltd. – Bearish option traders clawed-aboard global cruise company, Royal Caribbean, today despite the 0.5% increase in shares during the trading session to $24.24. A large-volume risk reversal in the June 2010 contract indicates rougher seas could cloud RCL’s horizon. One investor sold 20,000 calls at the June 30 strike for an average premium of 1.70 apiece, spread against the purchase of the same number of put options at the lower June 20 strike for 2.25 each. The net cost of the reversal amounts to 55 cents per contract. The investor responsible for the trade is likely long shares of the underlying stock. If this is the case, the long put position established today, provides downside protection beneath the effective breakeven point at $19.45. Conversely, if shares surge during the next seven months, the underlying stock position will be called away from the trader if shares exceed $30.00 by expiration in June.

GE – General Electric Co. – A sold straddle on General Electric this afternoon indicates one investor expects shares to settle at $16.00 by expiration in June of 2010. Shares edged slightly lower by less than 0.50% to $15.88 in late afternoon trading. The trader looked to the June 16 strike to sell approximately 5,000 calls for a premium of 1.61 apiece and 5,000 puts at the same strike for 1.89 each. The gross premium pocketed by the investor amounts to 3.50 per contract. The trader keeps the full 3.50 premium on the straddle if shares center at $16.00 through expiration. The investor may take profits ahead of expiration by buying back the short straddle for less than 3.50 per contract. Premiums on both calls and puts are elevated today because of the 6% increase in option implied volatility on the stock to 35.50%. The trader benefits from lower volatility on GE and from eroding time value of option premiums. Both factors drag option premiums lower and allow the trader to buy back the straddle in a profitable manner.

YHOO – Yahoo!, Inc. – The 0.5% decline in shares of the internet company to $14.93 did not deter one investor from taking a bullish stance in the April 2010 contract today. It appears the trader put on a ratio call spread to position for a rebound in shares by expiration.…
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Emerging Markets Heading Down, Say Option Traders

Today’s tickers: EEM, POT, JAVA, BARE, SHAW, EWZ & KG

EEM – iShares MSCI Emerging Markets Index ETF – Shares of the emerging markets exchange-traded fund are down 1.25% to $40.77 as we head toward the closing bell this afternoon. One bearish option trader exchanged 70,000 contracts in the January 2010 contract to protect against potential declines in the EEM through expiration. It appears the investor sold 35,000 calls at the January 41 strike for an average premium of 2.34 apiece. A chunk of 25,000 of those call options were spread against the purchase of 25,000 puts at the same January 41 strike for a premium of 3.00 per contract. The remaining 10,000 calls were spread against the purchase of 10,000 puts at the lower January 34 strike for 81 pennies each.

POT – Potash Corporation of Saskatchewan, Inc. – The Canada-based potash producer rose more than 2.5% to $96.72 despite the overall bearish trend for the larger marketplace today. Plain-vanilla call buying suggests bullish investors are hoping POT’s shares continue on the up-and-up through the end of 2009. Approximately 4,000 calls were picked up at the November 100 strike for an average premium of 3.05 apiece. More optimistic individuals looked to the December 105 strike to get long of some 6,200 calls for about 3.02 per contract. Investors holding the December 105 strike calls are now positioned to accumulate profits if shares of POT rally at least 12% from the current price to breach the breakeven point at $108.02.

JAVA – Sun Microsystems, Inc. – Call-selling and put-buying in the January 2010 contract suggests investors expect JAVA’s shares could experience further declines before the year is over. Shares fell less than 0.5% to $9.13 during the trading session. It appears traders sold 4,500 calls at the in-the-money January 9.0 strike for 40 cents apiece. Perhaps these individuals are throwing in the towel on JAVA, salvaging whatever premium they can in case the stock falls below $9.00. Additional bearishness took place at the January 7.5 strike where investors bought more than 16,000 puts for an average premium of 16 cents per contract. Perhaps put-buyers are long shares of the underlying stock. If this is the case, downside protection from the put options will kick in if shares plummet 20% to $7.34 by expiration in January.

BARE – Bare Escentuals, Inc. – The cosmetics and skin care products company popped…
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Sun bulls still looking for better news using option spreads

Today’s tickers: JAVA, APOL, EWZ, EMR, BBBY, WYNN, CSCO, CBG, GE & AA

JAVA Sun Microsystems, Inc. – Shares continue to slide for the second day after JAVA allegedly rejected IBM’s offer of $9.40 per share because it was too low. Currently, shares have declined by more than 4.5% to $6.26. A couple of contrasting trades caught our attention as one investor played the downside and another looked for upside movement in shares. In the May contract it appears that a ratio put spread was initiated with the sale of 22,000 puts at the May 5.0 strike for 46 cents each spread against the purchase of 11,000 puts at the May 6.0 strike for 89 cents apiece. The investor receives a credit of 3 cents for initiating this trade and stands to make a maximum profit of 103 cents if shares decline to $5.00 by expiration, but would burst apart at the seams should Sun’s shares breach $3.97. Further along in the October contract, a trader hoping to see JAVA rebound put on a bullish call spread which was partially funded by the sale of put options. At the October 5.0 strike price 10,000 puts were sold for a premium of 80 cents apiece. Meanwhile, a bull call spread was established via the purchase of 10,000 calls at the October 7.0 strike for 1.15 each and spread against the sale of 10,000 calls at the October 9.0 strike price for a premium of 40 cents apiece. This optimistic strategy yields the investor a 5 cent credit because the premium enjoyed on the sale of the put options and the sale of the higher strike calls more than offsets the cost of the October 7.0 strike call options. If shares can rally to $9.00 by expiration this fall, the investor stands to gain a maximum profit of 2.00 on the call spread plus the 5 cent premium. The two trades indicate bearishness in the near-term and bullishness as we head towards the concluding months of 2009.

APOL Apollo Group, Inc. – A provider of higher education to working adults, Apollo Group has experienced a 9% drop in shares to $63.17. Apollo’s share price slipped last week after the company warned that its profit margins would likely fail to meet analyst expectations. The recent share price erosion appears to be too severe as APOL still forecasts that it will achieve a 24%…
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Put sellers back General Electric

Today’s tickers: GE, TGT, XLI, CBST, HAL, DELL, XRT, CAL & JAVA

GE General Electric – Shares have enjoyed a 2% rally to $10.98. GE jumped to the top of our ‘most active by options volume’ market scanner after one investor took a bullish stance on the stock. The trader sold 82,800 puts at the April 10 strike price for a premium of 33 cents per contract. This implies that he does not think that shares are going to fall beneath $10.00 by expiration in a few weeks. He pockets 33 cents in exchange for bearing the risk that shares fall beneath the strike price, which would see him breakeven by $9.67 at which point his premium will have fully eroded. Should the 10 strike land in-the-money by expiration, this investor could have 8,280,000 shares of the underlying stock put to him at $10.00. Established open interest at the 10 strike is 77,000 lots and so this would appear to be the work of fresh interest in the contract today.

TGT Target Corp. – The retailer has had a slight share price rally of less than 0.5% to $36.18. Despite the modest rise today, a couple of investors were observed looking for a significant jump in shares heading into January of 2010. The first of two bullish trades was a sold straddle at the January 45 strike price. The sale of 2,600 puts for a hefty premium of 12.48 coupled with the sale of 2,600 calls for 3.08 yields the investor a gross premium of 15.56. He will retain the full 15.56 if shares can rally by 24% and settle at $45.00 by expiration. The second of the two trades was even more bullish. This investor established a bull call spread by purchasing 7,500 calls at the January 45 strike price for 3.10 each and by selling 7,500 calls at the January 55 strike for a premium of 1.02 apiece. The net cost to get bullish in the January contract amounts to 2.08 and yields a maximum potential profit of 7.92 if shares can rise to $55.00 by expiration. Shares would need to rally by 30% to the breakeven point at $47.08 in order for this investor to begin to garner profits.

XLI Industrial Select Sector SPDR – Shares of the industrials ETF have risen just under 0.5% to $19.93. The XLI ticker jumped onto our ‘most active by options…
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Chinese ETF sees more call option action

Today’s tickers: FXI, XL, AIG, WYE, EEM, JAVA, GIS, BK, SLM & C

FXI iShares FTSE/Xinhua China 25 – Shares are up by approximately 1.5% to stand at $27.96. The Chinese ETF appeared on our ‘most active by options volume’ market scanner after one investor purchased 40,000 in-the-money calls at the March 27 strike price for an average price of 55 cents per contract. The investor snagged the chunk of calls at a low premium earlier today relative to the current premium on the calls of 1.35. It looks like this trader offset the cost of the purchase by selling 40,000 calls at the April 30 strike price for a premium of 63 cents. Thus, he pockets a credit of 8 cents on the trade. As long as shares remain above $27 by Friday, this investor will have the right to collect 4,000,000 shares of the underlying stock at the strike price. But, by selling the calls in April this trader has capped upside gains at a maximum of 3.0 if shares happen to rally to $30 by expiration. The sale effectively provides him with an exit strategy in April.

XL XL Capital Limited – Shares of the property and casualty insurance firm have rallied 7.5% to $4.43 on the heels of AIG’s surge today. One investor looking for further upside gains purchased 6,400 calls at the March 5.0 strike price for 13 cents apiece. If shares can continue to rebound in this fashion and rise by 12% from its current price, then this trader would begin to profit at the breakeven share price of $5.13.

AIG American International Group – Outrage at $165 million in bonuses paid out to employees of the firm’s financial products division while taking in TARP funds at the same time apparently could not detract from AIG’s share price, which is soaring upwards by 40% to $1.35. While government appointed CEO Edward M. Liddy is getting reamed out at the Congressional hearings today, options investors have been busy trading calls across multiple contracts. Traders were heavily favoring the call side and skewed the call-to-put ratio to more than 4.5 calls to every put in action today. At the April 3.0 strike price, optimists picked up 3,700 calls for 10 cents each. Despite the huge rally today, shares would need to continue upwards by another 129% in order to reach the breakeven point at $3.10 by…
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Phil's Favorites

What China wants: 3 things motivating China's position in trade negotiations with the US

 

What China wants: 3 things motivating China's position in trade negotiations with the US

Courtesy of Penelope B. Prime, Georgia State University

Relations between the U.S. and China have deteriorated sharply in recent days after trade negotiations broke down, leading some to suggest we are on the cusp of a new “cold war.”

President Donald Trump blames the resumption of hostilities on China. Specifically, he and his negotiators say their Chinese counterparts backtracked on an agreement to change laws aimed at enforcing the ...



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Zero Hedge

White House Planned To Use Huawei As Trade 'Bargaining Chip'

Courtesy of ZeroHedge

If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining chip' during trade talks with the Chinese, Bloomberg just put the issue to rest.

In a report sourced to administration insiders, BBG reported that the Trump administration waited to blacklist Huawei until talks with the Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the talks.

...



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Kimble Charting Solutions

Commodities; Long-Term Bottom Being Created This Month?

Courtesy of Chris Kimble.

Is the Thomson Reuters Equal Weight Commodities creating a long-term bottom? What the index does at (3) over the next few weeks, will go a long way to answering this important question!

Commodities don’t have much to brag about over the past 8-years, as lower highs have taken place since the peak back in 2011. After the peak in 2011, they have created falling channel (1).

The index hit the top of this channel the prior two months at (2), creating back to back bearish reversal patterns.

Softness this month has the index testing 2017 lows and rising support at (3). While ...



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Insider Scoop

Off-Roaders Are In Buying Mood, BMO Says In Polaris Upgrade

Courtesy of Benzinga.

A long winter and the worst of the U.S.-China trade war may both be in the rearview mirror for off-road vehicle maker Polaris Industries Inc. (NYSE: PII), BMO Capital Markets said Tuesday.

The Analyst

Gerrick Johnson upgraded Polaris from Mark...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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