Posts Tagged ‘PHM’

Sizable Call Spread Constructed On Pulte

 

Today’s tickers: PHM, GE & FST

PHM - PulteGroup, Inc. – Shares in the homebuilder are down 1.3% this morning ahead of the Fed’s decision regarding further quantitative easing to trade at $15.35, giving up some of Wednesday’s 7% rally that lifted the stock to a four-year high of $15.70, on an intraday basis. Pulte’s shares moved up sharply yesterday on an upgrade to ‘Buy’ from ‘Hold’ with an increased target price of $17.00 from $13.00 at Williams Financial Group. Today, a large call spread initiated on Pulte suggests one big options market participant is positioning for shares in the homebuilder to extend their impressive run during the next 16 months. Since roughly this time last year, the stock has more than quadrupled, rising from a low of $3.29 on October 4th, 2011, to yesterday’s high of $15.70. The long-term bullish bet established in PHM options this morning yields maximum possible profits if the stock gains more than 60% by January 2014 expiration. The strategist responsible for the trade appears to have purchased 15,000 calls at the Jan. 2014 $15 strike for a premium of $3.75 each and sold the same number of calls at the Jan. 2014 $25 strike at a premium of $0.95 each. Net premium paid for the position amounts to $2.80 per contract and establishes an effective breakeven price of $17.80. Thus, the trader starts making money if the shares rally 16% to top $17.80, and could rake in maximum potential profits of $7.20 per contract in the event PHM’s shares soar 63% to top $25.00 by expiration.

GE - General Electric Co. – Options on General Electric are more active than usual this morning ahead of the Federal Reserve’s decision on whether to initiate a third round of bond buying to stimulate the economy. Heavy trading in GE Sep. 14 ’12 $22 strike weekly calls suggests one or more traders are preparing for shares in the name to potentially hit…
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Straddle-Seller Takes To AIG

Today’s tickers: AIG, PHM, TKLC & CECO

AIG - American International Group, Inc. – The insurer’s shares, which fell 2.5% to trade at $23.31 this afternoon, may remain range-bound through year-end, according to one options position established in the December contract. AIG was cut to ‘Hold’ from ‘Buy’ with a 12-month share price target of $26.00 at Sandler O’Neill today. It looks like one investor sold a 5,000-lot straddle at the Dec. $24 strike for a gross premium of $3.45 per contract. The straddle-seller keeps the full amount of premium received on the transaction as long as shares in AIG settle at $24.00 at expiration day next month. Some amount of premium is safe in the investor’s wallet as long as shares trade within the $20.55 to $27.45 range implied by the position. But, the investor risks uncapped losses to the upside above the upper breakeven price of $27.45, and losses to the downside in the event that shares slip beneath the lower breakeven point at $20.55, at expiration in December. The position was not tied to stock.

PHM - PulteGroup, Inc. – The homebuilding company popped up on our scanners this morning after one investor initiated a large bullish position that may be profitable if PulteGroup’s shares realize double-digit gains by expiration next month. Shares in PHM are currently up 1.8% at $5.58 as of 11:50 am in New York, perhaps on a positive note about the sector from an analyst at Wells Fargo. It looks like one trader purchased a block of 12,000 call options at the Dec. $6.0 strike for a premium of $0.35 each, in the first hour of the trading week. The investor stands ready to profit should shares in PulteGroup rally another 13.8% over the current price of $5.58 to surpass the effective breakeven point on the upside at $6.35 by expiration. Shares in PHM last traded above $6.35 at the beginning of August.

TKLC - Tekelec – Shares in the provider of communication network software and systems surged 11.8% to a six-month high of $11.07 this morning on news investors led by private-equity firm, Siris Capital Group LLC, agreed to buy Tekelec for $780 million. Shareholders in the Morrisville, North Carolina-based Company will reportedly receive $11.00 a share in cash in the deal. Relatively large call open interest in the November contract suggests some strategists saw the value of previously established bullish positions on Tekelec sky-rocket on the move…
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Contrarian Player Plants Bull Call Spread on Seed Maker Monsanto Co.

 Today’s tickers: MON, EWZ, XLB, HPQ, V, BCSI & SLB

MON - Monsanto Co. – Shares of the maker of genetically modified seeds seemed to be recovering at the start of the current session following Tuesday’s horrendous performance wherein the stock fell as much as 9.80% from an intraday high of $52.64 to a low of $47.50. MON’s shares managed to rebound 4.50% off Tuesday’s low of $47.50 to briefly touch an intraday high of $49.62, although the rally proved to be short-lived and shares are down 1.00% at $48.25 as of 3:15 pm ET. Though MON was unable to keep hold of earlier gains, one contrarian player is optimistic that Monsanto’s shares will reverse course and head back up by November expiration. The investor purchased a call spread, buying 5,000 calls at the November $55 strike at a premium of $0.85 each, and selling the same number of calls at the higher November $60 strike for a premium of $0.27 apiece. Net premium paid to establish the transaction amounts to $0.58 per contract. Thus, the investor is ready to make money should Monsanto’s shares surge 15.20% over the current price of $48.25 to surpass the effective breakeven point on the spread at $55.58 by November expiration. Maximum potential profits of $4.42 per contract are available to the bullish player if MON’s shares jump 24.35% to trade above $60.00 by expiration day.

EWZ - iShares MSCI Brazil Index ETF – Investors are placing near-term bearish bets on the Brazil fund this afternoon by selling calls to finance the purchase of put spreads in the October contract. The large pessimistic plays could be the work of traders hedging long positions or the mark of outright bearish bettors expecting the price of the underlying fund to slip lower ahead of expiration next month. Shares of the EWZ, an exchange-traded fund designed to replicate the price and yield performance of publicly traded securities in the aggregate in the Brazilian market – as measured by the MSCI Brazil Index, rallied…
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CVS’s Sympathy Rally Inspires Bullish Options Activity

 Today’s tickers: CVS, DRIV, AVP, WAG, ADBE, PHM & COP

CVS - CVS Caremark Corp. – The better-than-expected fourth-quarter earnings report from Walgreen Co. this morning helped CVS’s shares higher during the trading session. Shares rallied as much as 3.365% to rein in an intraday high of $31.64. The increase in the price of the underlying stock inspired one options player to extend bullish sentiment on the stock by initiating a calendar roll. It looks like the investor purchased 10,000 calls at the November $30 strike at a premium of $1.11 each back on September 17, 2010, when shares were trading around $29.72 each. The surge in shares since the purchase bumped up premium on those now in-the-money calls, which the investor sold today for a premium of $2.09 apiece. Net profits on the sale amount to $0.98 per contract. Next the investor renewed optimism on CVS by purchasing a fresh batch of 10,000 calls at the higher January 2011 $32 strike at a premium of $1.64 a-pop. Profits on the new position are available to the trader if CVS’s shares jump 6.3% to surpass the effective breakeven price of $33.64 by expiration day in January.

DRIV - Digital River, Inc. – It looks like an investor expecting Digital River’s shares to remain range-bound through November expiration sold a strangle in the second half of the trading session. Shares of the provider of a variety of marketing solutions and services increased more than 5.50% this afternoon to touch an intraday high of $33.34. The strangle-strategist appears to have sold 2,500 calls at the November $35 strike for a premium of $1.35 each, and sold the same number of puts at the lower November $28 strike at a premium of $0.525 apiece. Gross premium pocketed on the transaction amounts to $1.875 per contract. The trader keeps the full amount of premium received on the strangle play if DRIV’s shares trade within the boundaries of the strike prices described through expiration day. The short positions in both call…
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Option Traders Try Their Luck with Out-of-the-Money Calls on MGM Mirage

Today’s tickers: MGM, EWC, EWZ, DHI, XLF, GLW, TRA, CF, PHM, GFI & EBAY

MGM – MGM Mirage, Inc. – Shares of casino resort operator, MGM Mirage, rallied 5.25% this afternoon to $9.62. Option traders expecting shares to rally significantly in the next 12 months bought call options in the January 2011 contract. Approximately 20,000 calls were purchased at the January 2011 20 strike for an average premium of 70 cents per contract. Investors break even on the calls if MGM’s shares more than double by expiration. Shares must rally at least 115% to the breakeven price of $20.70 in order for call-buyers to begin to accumulate profits.

EWC – iShares MSCI Canada Index ETF – The exchange-traded fund, which mirrors the performance of publicly traded securities in the Canadian market, attracted pessimistic option players. The bearish risk reversal established on the fund contrasts with the nearly 1.5% rally in shares of the underlying to $26.30 during the session. It appears one investor sold 12,500 calls at the June 27 strike for a premium of 1.60 each, spread against the purchase of the same number of calls at the lower June 26 strike for two dollars premium apiece. The net cost of the reversal amounts to 40 cents per contract. Profits on the trade – assuming the investor holds no underlying stock position – accrue if shares of the EWC slip beneath the breakeven point to the downside at $25.60 by expiration in June 2010.

EWZ – iShares MSCI Brazil Index ETF – A number of bullish trades on the Brazil exchange-traded fund today suggest shares of the EWZ are set to rally in the first few months of the new year. Shares edged 1.5% higher during the trading day to stand at $73.21. Optimistic traders employed a number of different option strategies in order to position for bullish movement in the price of the underlying stock. One trader initiated a risk reversal in the January contract by selling 6,000 puts at the January 72 strike for 1.80 each, spread against the purchase of 6,000 in-the-money calls at the same strike for 2.70 apiece. The cost of getting long the call options is reduced to 90 cents per contract for the reversal player. Profits on the position amass above the breakeven price of $72.90. Another option bull unfurled the wings of a butterfly spread in the March contract. The trader…
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Zero Hedge

US Shale Firms To Spend $100 Million On West Texas And New Mexico Improvements

Courtesy of ZeroHedge. View original post here.

Over a dozen top US energy firms have agreed to devote $100 million towards much needed improvements in West Texas and New Mexico, in order to help the regions cope with shortfalls in health care, education and civic infrastructure in the wake of the shale oil and gas boom, the group said on Sunday. 

Chevron, EOG Resources, Exxon Mobil and Royal Dutch Shell are among 17 companies backing the Permian Strategic Partnership, as the cons...



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Message from Jeff Bezos - SNL

 

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Chart School

The Power of the Dow Jones Cycle

Courtesy of Read the Ticker.

Once again the data confirms cycles exists in the market. Value and other fundamental investors must concede cycles are in the stock market. [You can learn more about our Hurst Cycle tools here].

Previous Post Kitchin Cycle warned of market volatility

In the past this blog has posted the chart below, the Kitchin cycle or 900 periods, and you can see its success.

The cycle source:

.."Joseph Kitchin (1861–1932) was a British busine...



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Kimble Charting Solutions

King Dollar Creating A Topping Pattern This Week?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar has spent the majority of the past 7-years inside of rising channel (1), as it’s created a series of higher lows and higher highs.

The 2018 rally has it kissing the underside of potential resistance this week at (2), where it could be creating a bearish reversal pattern. This one week action has NOT changed the upward trend in King Dollar.

If it breaks rising support at (3), odds favor that some selling pressure takes place in the US$, which metals would lov...



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Insider Scoop

Analysts Cautious On Williams-Sonoma After Q3 Print

Courtesy of Benzinga.

Related WSM 48 Stocks Moving In Friday's Mid-Day Session 28 Stocks Moving In Friday's Pre-Market Session ...

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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

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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...



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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

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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...



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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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Free eBook - "My Top Strategies for 2017"

 

 

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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.

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All About Trends

Mid-Day Update

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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...

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About Phil:

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