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…
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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…
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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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Phil's Favorites

South Africa is caught in the global hype of the fourth industrial revolution

 

South Africa is caught in the global hype of the fourth industrial revolution

There’s nothing inherent in Fourth Industrial Revolution technologies that will result in economic growth. Shutterstock

Courtesy of Alison Gillwald, University of Cape Town

South Africa is caught up in the global hype of the Fourth Industrial Revolution (4IR). This is distracting it from the unfinished business of redressing inequality and creating the preconditions for an inclusive digital economy and society.

Reinvented by Klaus Schwab of the World Econo...



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Zero Hedge

Yield Curve Tumbles Back Into Inversion As Fed Sparks Mid-Cycle Maelstrom

Courtesy of ZeroHedge View original post here.

Today's chaos was brought to you by the the words "mid-cycle" (market threw a tantrum that The Fed Minutes were not more dovish) and "inverted" (the much-watched 2s10s curve tumbled back into inversion)  and the number '16' (line in the sand for VIX and gamma)

Chinese stocks trod water overnight...

Source: Bloomberg

Source: Bloomberg

European stocks surged on the day, led by Italy...

...



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Kimble Charting Solutions

Gold Is Knocking On Key Breakout Level

Courtesy of Chris Kimble

In 2013, Gold broke below its 23 percent Fibonacci retracement level and a bearish trend change took place at (1).

This was the beginning of a bigger decline that saw gold fall another 450 dollars.

Nearly six years later, Gold returns to this “breakdown” level in hopes of making it a new “breakout” level at (2).

If Gold can breakout at (2) it will send a very bullish message to the market.

Stay tuned – gold bulls are knocking on heaven’s door!

If pattern opportunities in Gold, Silver, Copper and Miners is imp...



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Insider Scoop

Earnings Scheduled For August 21, 2019

Courtesy of Benzinga

Companies Reporting Before The Bell
  • Analog Devices, Inc. (NASDAQ: ADI) is estimated to report quarterly earnings at $1.22 per share on revenue of $1.45 billion.
  • Lowe's Companies, Inc. (NYSE: LOW) is expected to report quarterly earnings at $2 per share on revenue of $20.94 billion.
  • Target Corporation (NYS...


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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a ...



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The Technical Traders

Fed Too Late To Prevent A Housing Market Crash?

Courtesy of Technical Traders

Real Estate is one of the biggest purchases anyone will make in their lifetime.  It can account for 30x to 300x one’s annual income and take over 30 years to pay off.  After you’re done paying for your property, now you have to keep paying to maintain it and to support the property taxes to keep it.  What has happened to the US Real Estate market since the 2008-09 global credit market collapse and is the US Fed behind the curve?

Case-Shiller Home Price Index

One of the most common indicators used to measure national housing affordability and price trend is the Case-Shiller Home Price Index.  In this chart, we are displaying the Case-Shiller National Home ...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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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

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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