Posts Tagged ‘JOYG’

Fast and Furious Four-Day Wrap-Up

Wheeeee, what a ride!

Like any good car race, the lead changes often in the markets.  Yesterday the bears took the lead as the combination of Hungarian debt issues and a disappointing jobs number were like a tire blow-out for the bulls, who were forced to pull in for a pit stop.  Fortunately, we had our seat belts on and had assumed the crash position as I had warned Members on THURSDAY Morning at 10:04:

Watch that 666 line on the RUT – we don’t want to lose that or even show weakness there…  ISM a bit disappointing, now we’ll see what holds but I’m out of short-term, unhedged, upside plays here

I felt strongly enough about it that we also posted it on Seeking Alpha, to warn as many people as possible, under the heading: "Phil Calls Short-Term Top."  I don’t post live trade ideas on Seeking Alpha but in Premium Member Chat (and you can subscribe here) I followed right up at 10:17 Thursday morning with the following trade idea:

BGZ (large-cap bear) is at $15.27 and I like them as a hedge here with the (June) $14/16 bull call spread at .75, selling the July $14 puts for .95 and that’s a net .20 credit on the $2 spread with about $2.70 in margin so you can do a 10 contract spread for a $200 credit and $2,700 in margin (according to TOS standard) with a $2K upside if the market even twitches lower.  Worst case is you own BGZ as a hedge to a dip below Dow 10,600 (your put-to area) at net $13.80 (9% lower than current price).

That’s what hedged trade ideas look like in our Member Chat.  At PSW, you need to put some time in LEARNING how to trade and, more importantly, how to hedge.  This is a fairly complicated options play but we take it BECAUSE IT WORKS!  There are many, many simpler ways to play that don’t work (or carry far more risk) but we prefer to teach our Members how to do the things that do work.  As it stands, just 48 hours later, BGZ is up 10% on Friday to $16.89 (so the spread is now 100% in the money) and June $14/16 bull call spread is now $1.50 while the July $14 puts are Down to .60 so net .90 already on the spread that already paid
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No-Thrills Thursday – Where’s the Kaboom?

Where’s the kaboom?  There’s supposed to be an Earth-shattering kaboom.

Well, it’s Thursday and the World hasn’t ended yet, contrary to the dire predictions we were getting last week and I guess that means you’d better buy some stocks!  We’ve been buying up a storm since falling below the bottom of our range with 50 long-term entries on our Buy List and another dozen longs in the first two days of this week including speculative longs (haven’t taken those for a while) on BP and RIG.  We even took two very bullish earnings plays on STP and JOYG – both of which were just way too low to ignore

JOYG was a complex spread from our 12:50 Alert to Members with a max profit at $55 but STP was a very simple, VERY bullish play where we bought the $9 calls for $1 and sold the $9 puts for .47, for a net .53 entry and no limit to our upside over $9.  Even if your margin requirement is 50% on the puts, you can pick up a single contract spread like this for $497 in buying power and your risk is being assigned the stock at net $9.53 but a move over $10 nets you a 10% gain in one day.  As long as you don’t mind owning the stock on a move down, these are fun earnings plays to make…

We didn’t expect to be getting bullish (and we are still well-hedged for the next fat-fingered fall) but at 12:27 on Tuesday, I posted the following chart for Members where I drew a line in the sand for the downturn:

Yesterday I noted in the Morning Post that we were completing that move down into the open so all we really did was follow-through with our plan to flip bullish for at least a bounce.  As we drifted along into the afternoon on a low volume move up, I re-examined the chart and decided it was a fine afternoon for a stick save and I drew this updated chart with the attached comment:

 

10,080 is the 0% line for the Dow and if I were Mr. Stick, I’d use that as my go point and jam the Dow up 100 from there, back to about 1,100 (on the S&P) so that’s the game(d) plan for the afternoon if we are getting back to the usual bullish shenanigans.  Which would


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Joy Global Options Active at the Close

Today’s tickers: JOYG, PRX, POT, IOC, QLGC, CAT & IBB

JOYG – Joy Global, Inc. – The manufacturer of mining equipment used to extract coal, copper, and other minerals, realized a 6% improvement in shares today to $55.13. Large-volume options trading took place just ahead of the closing bell as one investor banked gains and extended a bullish position on the stock. It appears the trader originally purchased 15,000 calls at the January 50 strike on August 4, 2009, for a premium of between 2.00 to 2.55 per contract. Today, he seems to have sold all 15,000 calls for 8.10 apiece. Net profits received on the closing sale amount to a minimum of 5.55 each up to a maximum of 6.10 per contract. Depending on the price the investor paid to initially purchase the calls, he reeled in at least $8,325,000, and could have banked as much as $9,150,000, by selling the now deep in-the-money call options today. Perhaps hoping to accumulate additional profits by expiration in January 2010, the trader doubled up on call options by purchasing 30,000 lots at the higher January 60 strike for an average premium of 3.30 per contract. The investor may add to his profits if shares rally another 15% to surpass the breakeven point at $63.30 by expiration day.

PRX – Par Pharmaceutical Companies, Inc. – The distributor of branded and generic pharmaceuticals in the U.S. appeared on our ‘hot by options volume’ market scanner due to bearish options trading. Shares of PRX fell more than 5% to $22.51 after receiving a downgrade to ‘neutral’ from ‘buy’ at Bank of America Merrill Lynch. One pessimistic option trader initiated a credit spread on PRX using call options in the November contract. The transaction involved the sale of 2,500 calls at the November 22.5 strike for 1.47 apiece, spread against the purchase of 2,500 calls at the higher November 25 strike for 55 cents each. The investor receives a net credit of approximately 92 cents per contract. The full 92 cent credit is retained by the trader as long as the November 22.5 strike call options land out-of-the-money by expiration.

POT – Potash Corporation of Saskatchewan, Inc. – Shares of Canada-based Potash Corp. surged more than 5.5% to $102.90 today on speculation that BHP Billiton Ltd. – the world’s largest mining company – may be interested in acquiring the fertilizer producer. Option traders exchanged…
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Joy Global Calls Active

Today’s tickers: JOYG, VRSN, GE, DAL, TER, SCHW & KR

JOYG - The mining equipment manufacturer has enjoyed a more than 2.5% increase in shares during today’s session to stand at $44.40. Investors hoping for continued bullish momentum for the stock busied themselves with buying up call options in the September contract. It looks like nearly 8,000 call options were coveted for an average premium of 85 cents apiece at the now in-the-money September 44 strike. Investors holding the calls have the right to take delivery of the stock at $44.00, but they will not realize profits unless shares of JOYG climb through the breakeven point at $44.85 by expiration on Friday. – Joy Global, Inc. –

VRSN - Internet infrastructure services provider, VeriSign, jumped onto our ‘most active by options volume’ market scanner today after 25,000 call options were traded by one investor targeting the December contract. Shares of VRSN are currently trading flat on the day at $22.46. The chunk of 25,000 calls were traded at the out-of-the-money December 25 strike for an average premium of 87 cents per contract. It appears that the calls were tied to shares of the underlying stock. It could be the case that the investor is taking a bullish stance on VRSN by initiating a covered call. If this is the case, the trader purchased shares of the underlying and simultaneously shed call options. This strategy would partially offset the cost of getting long the stock by the amount of premium received and establish an effective exit strategy. The covered call reduces the price paid per share to about $21.59 and positions the trader to attain maximum potential gains of 3.41 – or 16% – in the event that the stock rallies higher than $25.00 by expiration. Shares would be called from him by expiration day if the calls were to land in-the-money. Another possible motivation for the call transaction is that the investor is decidedly bearish on VeriSign. If this is the case, the trader sold the stock short because he believes the stock will fall, and then bought calls as an effective stop-loss strategy. If the stock should rally by expiration rather than decline, the trader can purchase the shares for $25.00 each to cover his short position and cap potential losses. – VeriSign, Inc. –

GE - As its shares rally, option traders are increasingly attracted to bullish call options on…
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Zero Hedge

Trump Sues Manhattan D.A. In Response To Subpoenas

Courtesy of ZeroHedge View original post here.

And now a plot twist: with Trump under relentless attack for the past three years to disclose his tax returns, on Thursday morning the president struck back, suing Manhattan District Attorney Cyrus Vance to block an attempt by New York state prosecutors to obtain eight years of the president’s tax returns in a probe of whether the Trump Organization falsified business records.   

...



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Phil's Favorites

At Press Conference, Fed Chair Powell Refuses to Answer Whether Wall Street Banks Are Too Big to Manage

Courtesy of Pam Martens

Fed Chairman Jerome Powell at Press Conference, September 18, 2019

Following a lack of liquidity on Wall Street, which necessitated the Federal Reserve having to provide $53 billion on Tuesday and another $75 billion on Wednesday to normalize overnight lending in the repo market, the Chairman of the Fed, Jerome (Jay) Powell held his press conference at 2:30 p.m. yesterday. The press gathering followed both a one-quarter point cut in the Fed Funds rate by the Fed yesterday as well as the first intervention by the Fed in the overnight lending market since the financi...



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Insider Scoop

How Cheapskates Can Access Mid Caps

Courtesy of Benzinga

For investors that don't like stocks but do enjoy saving money on fund fees, exchange traded funds are highly desirable destinations. And for those looking to dance with mid-cap stocks, a desirable asset class, there are plenty of compelling ETFs for cost-conscious investors to consider.

What Happened

The Schwab U.S. Mid-Cap ETF (NYSE: ...



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The Technical Traders

SAFE ASSETS - A TRADING STRATEGY FOR UTILITIES, GOLD, AND BONDS

Courtesy of Technical Traders

Chris Vermeulen, Founder of The Technical Traders shares his trading strategy for safer assets. While precious metals and bonds had a great run, the charts are showing the utilities could be the place to be in the short term. It’s important to note we are not saying the other safe havens are going to crash but it’s all about the time frame and playing the sector that could pop first.

LISTEN HERE NOW

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Kimble Charting Solutions

Stocks, Oil, and Bond Yields At Critical Bullish Breakout Tests!

Courtesy of Chris Kimble

It’s not often that three asset classes reach similar important trading points all at once.

But that’s exactly what’s happening right now with stocks, crude oil, and treasury bond yields.

And this is occurring on Federal Reserve day no less! Something has got to give.

In the chart above y...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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Promotions

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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.

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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. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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