Posts Tagged ‘KG’

Bank of America Bear Cleans Up

Today’s tickers: BAC, FXY, VALE, ATPG, CAT, EBAY, CSCO, KG, NE & AGN

BAC – Bank of America Corp. – Activity in out-of-the-money call options on Bank of America in the first half of the trading session appears to be the work of an investor taking profits on the closing purchase of a previously established bearish short call position. BAC’s shares surrendered 1.85% today to stand at $15.88 as of 2:45 pm (ET). It looks like the investor originally sold 20,500 calls at the November $24 strike for an average premium of $0.37 per contract back on April 28, 2010, when shares of the underlying stock were trading at a volume-weighted average price of $17.73 each. In the past four weeks since the initial sale of the calls, Bank of America’s shares declined 12.12% down to the current price of $15.88. The call seller was properly positioned to benefit from share price erosion, and today was able to buy back the same call options for just $0.10 apiece. Thus, the closing purchase of the calls yields net profits of $0.27 per contract to the responsible party.

FXY – CurrencyShares Japanese Yen Index Fund – A sizeable debit call spread enacted on the FXY, an exchange-traded fund designed to reflect the price of the Japanese Yen, indicates one options strategist is expecting shares of the underlying fund to rally sharply by expiration in January 2011. Shares of the fund are currently up 0.18% at $109.14 as of 1:52 pm (ET). The investor purchased 8,709 calls at the January 2011 $110 strike for a premium of $4.40 apiece, and sold the same number of calls at the higher January 2011 $125 strike for $1.00 in premium each. The net cost of the transaction amounts to $3.40 per contract, thus dictating a breakeven price – above which profits start to accumulate – of $113.40. Shares of the FXY must rally at least 3.90% from the current value of $109.14 before the responsible party starts to make money. Maximum potential profits of $11.60 per contract are available to the spread trader if shares jump 14.53% from the current value of the fund to $125.00 in the next eight months to expiration. It does not appear the fund’s share price has ever exceeded the current 52-week high of $115.40, attained back on November 30, 2009.

VALE – Vale S.A. – Shares of the world’s largest…
continue reading


Tags: , , , , , , , , ,




Option Trader Prescribes Bullish Risk Reversal on CVS

Today’s tickers: CVS, LIZ, ITMN, MA, V, RF, KG, HW, WSM, AEP & NTAP

CVS – CVS Caremark Corp. – Shares of the pharmacy retail chain are up 1.5% to $31.11 perhaps due, in part, to the ‘buy’ rating it received at UBS today. Optimistic options activity took place in the December contract as one investor initiated a bullish risk reversal. It appears the trader sold 4,400 puts at the December 31 strike for an average premium of 94 cents apiece in order to finance the purchase of the same number of calls at the higher December 32 strike for 63 cents each. The investor pockets a 31 cent credit on the trade, which he retains in full as long as shares remain above $31.00 through expiration. Additional profits accumulate if CVS’s shares rally above $32.00.

LIZ – Liz Claiborne, Inc. – A 15,000-lot covered call in the January 2011 contract on Liz Claiborne today suggests shares are likely to recover, albeit at a glacial pace. Shares of the apparel and accessories retailer suffered a 5% decline to $4.55 during the trading session. One investor effectively purchased shares of the underlying stock for $3.30 apiece by selling 15,000 calls at the January 2011 5.0 strike for a premium of 1.25 each. Thus, the trader stands ready to accrue gains of 51% if shares of LIZ appreciate to $5.00 by expiration. The long-term positioning of the covered call play provides several advantages to the investor. One advantage is that the call options do not expire for another 13 months, which leaves ample time for LIZ’s shares to appreciate up to the strike price of $5.00. The 15,000-lot call transaction represents nearly 50% of the total existing open interest on LIZ of 31,502 contracts. Note that shares last traded above $5.00 yesterday at approximately 10:35 am (EDT).

ITMN – InterMune, Inc. – A bull call spread on the biotechnology company today suggests shares could rally significantly by expiration in April 2010. Bullish options activity on the stock belies the more than 3% decline in ITMN’s shares during the session to $10.94. The call spread involved the purchase of 3,750 calls at the April 15 strike for an average premium of 2.25 each, marked against the sale of the same number of calls at the higher April 25 strike for 75 cents apiece. The net cost of the transaction amounts to 1.50 per…
continue reading


Tags: , , , , , , , , , ,




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…
continue reading


Tags: , , , , , ,




 
 
 

Phil's Favorites

Artificial intelligence will make you smarter

 

Artificial intelligence will make you smarter

People plus machines will surpass the capabilities of either element alone. metamorworks/Shutterstock.com

Courtesy of Terrence Sejnowski, University of California San Diego

The future won’t be made by either humans or machines alone – but by both, working together. Technologies modeled on how human brains work are already augmenting people’s abilities, and will only get more influential as society gets used to these increasingly capable machines.

Technology optimists have envisione...



more from Ilene

Zero Hedge

Israel's Defense Chief Says "No Choice But War" As Forces Build Along Gaza Border

Courtesy of ZeroHedge. View original post here.

We reported over the weekend that Israel has mustered its largest build-up of tanks and armored personnel carriers since 2014 at a deployment area along the border with Gaza and that "all-out war" looks inevitable after weeks of heightened tensions with Hamas. This after special UN envoy for the Middle East, Nickolay Mladenov late last week warned the UN Secur...



more from Tyler

Kimble Charting Solutions

Short the S&P 500 and Go Long Gold Miners Time?

Courtesy of Chris Kimble.

The precious metals sector continues to be a “grind”, offering a few trades but mostly sideways to lower action. Gold prices have slogged along and this had held the Gold Miners (NYSEARCA:GDX) back… until recently.  The Gold Miners (GDX) and the broader Gold & Silver Miners Index (XAU) came to life in September and October.

The miners are in a multi-year down trend, however there is a potential bullish setup in place. See the chart below where we highlight the ratio of the Mining Index (XAU) to the S&P 500 (SPY). The ratio, which Gold Bugs want to see rising, looks to have created a bullish reversal last month at the 2016 lows at point (1).

And October is seeing a follow-through move...



more from Kimble C.S.

Insider Scoop

Wedbush: Unlike Many Retail Peers, RH Is 'Thriving'

Courtesy of Benzinga.

Related RH Benzinga's Top Upgrades, Downgrades For October 23, 2018 RH's Retail Strategy, Recent Pullback Turn Stifel Bu...

http://www.insidercow.com/ more from Insider

Chart School

Weekly Market Recap Oct 21, 2018

Courtesy of Blain.

After the heavy selling the week prior there was sure to be an oversold bounce and indeed last Tuesday brought much of that.  It is always interesting to see what happens after that bounce – often in this bull market, once the indexes turn back up they move like a freight train.  This time – thus far at least – the action has been less aggressive.  Selling on Thursday took the S&P 500 right back down to the 200 day moving average and rally attempts Friday were fruitless.  In whole the S&P 500 barely budged for the week.

Yields on the 10 year have thus far held their own “breakout” level:

The Chinese market had an interesting Friday with an “...



more from Chart School

Digital Currencies

Grocers: Get ready to join the blockchain party

 

Grocers: Get ready to join the blockchain party

Five people died and more than 200 got sick during a 2018 E. coli outbreak, the largest in more than a decade. The bacteria was traced to contaminated romaine lettuce. (Shutterstock)

Courtesy of Sylvain Charlebois, Dalhousie University

In the wake of this year’s large E. coli outbreak, Walmart notified its leafy green suppliers that they must be using blockchain technology to trace their products before the end of 2019.

Walmart, one of the world’s largest retailers, has be...



more from Bitcoin

ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



more from ValueWalk

Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

more from Our Members

Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



more from Biotech

Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



more from M.T.M.

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 ...



more from OpTrader

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

...

more from Promotions

All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David





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...

Learn more About Phil >>


As Seen On:




About Ilene:

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.

Market Shadows >>