Posts Tagged ‘KRE’

Regional Banking ETF Put Volume Pops During Afternoon Trading

 Today’s tickers: KRE, CPN, PRGO, FITB, DPS, SMH & M

KRE - SPDR KBW Regional Banking ETF – A large-volume debit put spread initiated on the SPDR KBW Regional Banking ETF this afternoon suggests one options investor is wary that the significant run up in the price of the underlying fund since the start of December could reverse course next year. Shares of the KRE, an exchange-traded fund that tracks the performance of the KBW Regional Banking Index, are up slightly by 0.10% to trade at $25.18 as of 3:30pm. The strategist responsible for the put spread may be building up downside protection, or alternatively, could be taking an outright bearish stance on the regional banking sector through March 2011. Shares in the fund rallied 14.25% during December so far to reach a 6-month high of $25.59 this past Wednesday. The put-spreader picked up 19,000 put options at the March 2011 $24 strike for a premium of $0.81 each, and sold the same number of puts at the lower March 2011 $20 strike at a premium of $0.16 apiece. Net premium paid to initiate the spread amounts to $0.65 per contract. Thus, the investor is prepared to make money, or realize downside protection, if shares of the KRE fall 7.3% from the current price of $25.18 to breach the effective breakeven point on the spread at $23.35 by March 2011 expiration. Maximum potential profits of $3.35 per contract are available to the put-spreader should shares of the underlying fund plummet 20.6% lower to trade below $20.00 by expiration day next year. The fund’s shares have not traded below $20.00 in more than a year.

CPN - Calpine Corp. – A large chunk of call options were picked up on Calpine Corp. late in session by a bullish strategist positioning for shares to rally substantially ahead of January 2011 expiration. Shares of the independent power generation company are up 2.6% this afternoon to stand at $13.22 in the final hour of the trading week. Calpine was recently…
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Capital One Bears Out in Full Force in Options Land

Today’s tickers: COF, CAT, XRT, XLY, XLB, XLF, KRE, BRK.B, MCD & ISRG

COF – Capital One Financial Corp. – Better-than-expected fourth-quarter earnings of $0.83 per share, which blew straight past average analyst estimates of $0.45 a share, failed to shield the stock from the massive beating received during the trading session. Shares plummeted 11% to an intraday low of $38.18 after analysts at FBR Capital Markets slashed their forecast for COF’s earnings. FBR analysts cited “shrinking margins and new U.S. credit-card regulations” as reasons for the reducing earnings estimates according to one Bloomberg article released this morning. Bearish option traders are out in full force, populating both the call and put sides of the stock with pessimistic transactions. Investors purchased put options as low as the February $35 strike where 1,200 contracts were picked up for an average premium of $0.57 apiece. Traders long the puts are perhaps bracing for an additional 9.80% shift down in the price of the underlying to the breakeven point on the puts at $34.43 by expiration next month. Approximately 2,000 nearly in-the-money puts were purchased at the higher February $38 strike price at an average premium of $1.46 apiece. Call selling added to the bearish picture as some 2,100 contracts were shed at the out-of-the-money February $40 strike for a premium of $1.43 per contract. Finally, one trader initiated a pessimistic stance in the January 2012 contract. Perhaps this investor believes today’s turmoil is just the beginning of Capital One’s troubles, or, alternatively, the trader may simply be looking to keep the dollar credit on the following transaction. The trader purchased 1,500 puts at the January 2012 $30 strike for a premium of $4.36 each, spread against the sale of 3,000 puts at the lower January 2012 $25 strike for which he received $2.68 apiece. The investor pockets a net credit of $1.00 per contract on the spread, which he keeps if shares settle above $30.00 by expiration.

CAT – Caterpillar, Inc. – Surprisingly bullish trades befell machinery maker Caterpillar today. CAT’s shares commenced the trading day with higher shares, but slipped lower during the session, and currently reside 1.35% lower on the day at $56.09. Investors expecting shares to recover by expiration in March shed 5,000 in-the-money put options at the March $57.5 strike for an average premium of $3.76 apiece. Open interest at that strike of 5,169 lots suggests this transaction…
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Put Volume Explodes on iShares MSCI Hong Kong Index ETF

Today’s tickers: EWH, HPQ, M, GLD, LCC, KRE, BBY, WAG & DYAX

EWH – iShares MSCI Hong Kong Index Fund – The EWH popped onto our ‘most active by options volume’ market scanner today after one investor traded 70,000 put options on the fund. Shares of the ETF are up 0.25% this afternoon to stand at $16.22. It appears the trader shed 35,000 puts at the January 14 strike for 10 cents apiece in order to partially offset the cost of purchasing 35,000 puts at the June 14 strike for 65 cents each. The net cost of the protective play amounts to 55 cents per contract. The nearer-term short put position in the January contract implies the investor does not expect shares to dip below $14.00 by expiration in less than two months. The investors stands ready to have a whopping 3,500,000 shares of the underlying put to him at $14.00 apiece in the event that the put options do land in-the-money. The long put position in the June 2010 contract suggests the trader is already long the stock. He is most likely extending downside protection on the underlying position for the next seven months before expiration. Shares of the EWH would need to fall 17% from the current price in order for downside protection to kick in beneath the breakeven point at $13.45. We note that shares of the fund have traded above $14.00 since July 15, 2009.

HPQ – Hewlett-Packard Co. – Medium-term bullish trading graced the global technology company’s February 2010 contract despite a 1% decline in HPQ shares this afternoon to $49.06. A risk reversal by one option player suggests shares could increase significantly by expiration in February. The trader sold 12,000 puts at the February 40 strike for an average premium of 27 cents apiece, and bought the same number of calls at the higher February 60 strike for 8 pennies each. The transaction yields a net credit of 19 cents per contract. The investor retains the full credit as long as HPQ’s shares remain above $40.00 through expiration day. Additional profits accumulate if the stock surges 22% higher than the current price to surpass the $60-level. The long call position probably serves more as a stop loss, or insurance policy, on the trade in the unlikely event that shares do jump more than 22% in the next three months. The reversal was more likely…
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China Fund Sees Brisk Two-Way Action

Today’s tickers: FXI, KRE, WFC, FDX, JWN, HUM, ALL & MSFT

FXI– The Chinese ETF is higher by less than 1% to stand at $37.35, but we noticed a number of investors getting long of protective put options in the July contract. It appears that approximately 50,000 puts were purchased at the July 34 strike price for an average premium of 1.25 per contract. Due to the large size of the trade, it is likely that the investor was either already long shares of the underlying or perhaps bought shares of the stock today. The puts provide downside protection beginning at any share price below the breakeven point at $32.75. Additional put buying was observed at the nearly at-the-money July 37 strike price where about 5,000 puts were picked up for 2.53 each. Later this afternoon a large straddle has been sold at the July 38 series involving 15,000 calls and puts on each side for a combined premium of 4.35. The investor doesn’t want shares to stray above a share price of $42.35 or fall beneath $33.65 ahead of expiration. – iShares FTSE/Xinhua China 25 Index Fund

KRE– The regional banking fund has declined less than 1% to $18.97. The KRE ticker symbol leapt onto our ‘most active by options volume’ market scanner after a burst of activity in the July contract. One investor took profits today by selling to close a long put position. He originally purchased 30,000 puts at the July 22.5 strike price for 3.30 apiece back on June 2, 2009. Today He sold all 30,000 lots for 4.10 per contract. The profit on the trade amounts to 80 cents or $2,400,000. Hoping to see similar gains in the future, the same individual appears to have enacted a repeat performance by purchasing another 30,000 puts at the lower July 20 strike price for an average premium of 2.15 each. The trader will once again pocket profits if he can manage to sell to close at a price higher than the premium paid today. – SPDR KBW Regional Banking ETF

WFC– Shares of the large TARP-recipient bank have slipped more than 3% today to $23.67 amid Standard & Poor’s revision of WFC’s counterparty credit rating down to AA-/A-1+. The outlook from S&P Ratings Services is reportedly negative and options activity on the stock today suggests some investors expect continued bearish movement on the stock through expiration
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Phil's Favorites

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy

 

What is raising the federal minimum wage likely to accomplish and not likely to accomplish?

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy

It may seem like a lot, but it’s not the most important change in the bill. AP Photo/J. Scott Applewhite

Courtesy of Felix Koenig, Carnegie Mellon University

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Zero Hedge

For Bonds, This Is Now The Second Worst Bear Market In 40 Years

Courtesy of ZeroHedge View original post here.

Last December, we predicted that the US was heading for a "titanic taper tantrum" in 2021, to an extent as a result of a sharp drop in bond demand as a result of reduced bond purchases by the Fed but also due to a spike in inflation which would lead to a sharp drop in demand for duration.

So fast forward to this week when the crash in US Treasurys, and especially the belly of the curve led by a plunge in 5Y prices...

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ValueWalk

There's A "Chip" Shortage: And TSM Holds All The Cards

By Mauldin Economics. Originally published at ValueWalk.

“You drove 1,000 miles just for this game?” Christmas 1988 was a stressful time for many American parents. Nintendo’s Super Mario Bros. 2 was the must-have toy that year. But copies of the hit videogame were as scarce as hen’s teeth.

Q4 2020 hedge fund letters, conferences and more

ABC News ran a 20/20 special on the shortage called “Nuts for Nintendo.” They chatted to one dad who drove 1,000 miles from Indiana to NYC in the hopes of grabbing a copy.

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What is fascism?

 

What is fascism?

A Donald Trump supporter wears a gas mask and holds a bust of him after he and hundreds of others stormed the Capitol building on Jan. 6, 2021. Roberto Schmidt/AFP via Getty Images

Courtesy of John Broich, Case Western Reserve University

Since before Donald Trump took office, historians have debated whether he is a fascist.

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Biotech/COVID-19

How does the Johnson & Johnson vaccine compare to other coronavirus vaccines? 4 questions answered

 

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The Johnson & Johnson vaccine only requires one dose. Phill Magoke/AFP via Getty Images

Courtesy of Maureen Ferran, Rochester Institute of Technology

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Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.







Video on the subject.







Charts in the video


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Digital Currencies

Bridgewater Explains When It Will Invest In Bitcoin

Courtesy of ZeroHedge

Two weeks ago, Bridgewater founder Ray Dalio called Bitcoin "one hell of an invention" adding that:

"I expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity, and Bitcoin won’t escape our scrutiny.”

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Kimble Charting Solutions

Is Rising Inflation About To Hit U.S. Economy In Big Way?

Courtesy of Chris Kimble

Inflation seems to be a thing of the past… but current trading in bond and commodity markets tell us that it could become a thing of the future!

Inflation hasn’t been an issue, or even on our radar, since the 1980s. Sure, the 2007 surge in oil prices offered some concern but the financial crisis killed any thoughts of inflation.

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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

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Economic Data Scheduled For Friday

Courtesy of Benzinga

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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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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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