Posts Tagged ‘RIO’

Frenzied Call Buying At Family Dollar As Shares Hit Record High

Today’s tickers: FDO, BBBY & RIO

FDO - Family Dollar Stores, Inc. – Call buyers flocked to Family Dollar Stores today, with shares in the operator of general merchandise retail discount stores trading up as much as 4.6% to a record high of $62.84 on the heels of encouraging consumer sentiment and spending data. The stock posted big gains in the month of March, gaining 15.5% in the past four weeks, and it looks like some traders are positioning for the good times to continue. Bullish trading in the front month calls is heaviest at the April $65 strike where more than 5,000 calls have changed hands against open interest of 324 contracts, as of 12:50 p.m. in New York. It looks like the majority of the $65 calls were purchased for an average premium of $0.45 apiece, thus positioning buyers to profit in the event that shares in FDO add another 4.2% to top $65.45 by expiration next month. Lighter-volume call buying spread to the May $60, $62.5 and $65 strikes, as well as the July $65 strike calls. Nearly 10,000 option contracts are in play on Family Dollar Stores this afternoon, a more than ten-fold increase over the stock’s 90-day average options volume of 925 contracts.

BBBY - Bed Bath & Beyond, Inc. – Shares in the operator of retail chain stores Bed Bath & Beyond, Christmas Tree Shops and others, kicked off the final trading session of the week in positive territory, but have since surrendered earlier gains to trade 0.60% lower on the session at $66.30 as of 11:30 a.m. in New York. Call volume on Bed Bath & Beyond spiked this morning after one strategist initiated a ratio spread in the May expiry. The trader appears to have purchased 2,000 calls at the May…
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Broadcom bears use put spread and call sales

Today’s tickers: BRCM, BNI, EMC, RIO, GM, VIX, XLF, BAC & ARNA

BRCM Broadcom Corp. Class A – Shares are currently off by 3% to $20.01 for Broadcom, which is engaged in semiconductors for wired and wireless communications. Options activity was largely contained to the May contract. One investor established a put spread by purchasing 7,500 puts at the May 20 strike for 2.00 each, and selling 7,500 puts at the May 18 strike for a premium of 1.15 apiece. The net cost of the trade amounts to 85 cents and yields a maximum potential profit of 1.15 if shares fall to $18.00 by expiration. Further evidence of investor bearishness on BRCM came in the form of 5,000 sold calls at the May 20 strike price for a 2.00 premium per contract. Apparently investors agree that, at least in the near-term, the current $20.01 share price is due for a decline. Option implied volatility has jumped from Friday’s reading of 64% to the current value of 70%.

BNI Burlington Northern Santa Fe Corporation – When you need your share price to rise in the face of a 4.3% equity market decline you could do one of two things. First, have Goldman Sachs upgrade the company or second, find someone to suggest out loud that your shares might be bought by legendary investor, Warren Buffett. Sadly, neither seems to have worked for the operator of one of the largest railroad networks in North America, which has seen its shares dip slightly by 2% to stand at $60.71. BNI was upgraded to ‘buy’ from ‘neutral’ at Goldman Sachs amid rumors about a possible purchase of the company by Berkshire Hathaway. Option traders reflected the bullish upgrade by purchasing calls in the April contract. At the April 65 strike price 3,300 calls were scooped up for an average price of 1.50, while at the higher April 70 strike more than 3,200 calls were bought for a 55 cent premium. In order for the April 70 calls to turn profits for optimistic traders, shares would need to rally by 16% to the breakeven share price of $70.55 by expiration.

EMC EMC Corporation – The IT support company has experienced a share price decline of about 3.5% to $11.17. EMC edged onto our ‘most active by options volume’ market scanner after some large volume trades were initiated in the April and May contracts. It…
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Dividend cut sparks put buying at Alcoa

Today’s tickers: AA, RIO, TGT, HD, IP, VIX, ORCL, COGO & FRED

AA Alcoa Inc. – The producer of aluminum has dropped more than 9% to $5.55 after the company slashed its dividend by 3 cents in an effort to cut back on capital spending. AA hopes these measures will help strengthen its position in the case of a lengthy economic downturn. Most of the action in options-land occurred on the put side as investors seek to profit from declines in the share price. Fresh buying was observed at the March 5.0 strike price where around 25,000 puts were picked up for an average of 15 cents apiece out of the 47,000 puts traded at the strike. Shares of Alcoa would need to fall another 12% by Friday in order to reach the breakeven price of $4.85 – the price at which put-buyers begin to amass profits. Similar purchases were observed at the 5.0 strike in April where some 53,000 puts changed hands throughout the day at an average premium of 52 cents per contract. Interestingly, one investor was seen looking for recovery in the October contract by purchasing 4,000 calls at the 7.5 strike for 1.10 each. We believe this transaction was funded by the sale of 8,000 calls at the April 7.5 strike price for a premium of 23 cents each. This investor does not see Alcoa rebounding in the next 30 days, but he is optimistic that shares will increase by about 35% in order for the calls to land in-the-money by expiration in October. In stark contrast to the optimism seen in the previous trade, one investor picked up 12,000 puts at the 2.5 strike price in January 2010 at a cost of 50 cents per contract. This trade predicts nothing but doom-and-gloom for Alcoa all the way through to the start of next year.

RIO Companhia Vale do Rio Doce ADS – Shares of the metals and mining company have rallied 2% to $13.73 perhaps due to the selection of a new chairman-designate who stated that his immediate focus would be centered on finalizing the transaction with Chinalco (Aluminum Corp. of China). Global economic conditions continue to thrash commodity markets and Rio Tinto sees little chance of a rebound this year. Thus, the new chairman (Jan du Plessis) is hoping that finalized deal – which would increase Chinalco’s stake in RIO to 18% – will…
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Hartford covered call writer strikes gold, albeit rather early in the game

Today’s tickers: HIG, ORCL, LDK, AXP, MS, JNPR, RIO & BWA

HIG – The Hartford Financial Services Group, Inc. – The roof is on fire at HIG after shares sky-rocketed up by over 23.5% to $8.25. But, one investor appears to have jumped the gun today by initiating the sale of over 17,000 calls at the January 2011 7.5 strike price for a premium of 3.90 at which point the tinder was aflame, but the roaring blaze was yet to come. We believe the sale was part of a covered call in which the underlying shares were purchased simultaneously. The investor appears to have been selling volatility which was 130.3% at the 7.5 strike when shares were at $6.65. It is likely that he was happy with the 3.90 in premium coupled with the hope inherent in this trade of a 13% rally in shares to $7.50. The investor was likely thinking that if shares rose to meet the strike price, the underlying stock would likely get called away from him at expiration. However, in hindsight it seems the timing of his trade was poor as premiums have since soared to 5.20 and shares have exited the building (so to speak).

ORCL – Oracle Corporation – Shares of the software and services company have increased by roughly 3% to stand at $16.35. ORCL caught our attention due to a number of noteworthy options trades that played out today. A sold strangle was initiated in April by selling 7,500 puts at the 14 strike price for a premium of 50 cents, and by selling 7,500 calls at the April 18 strike for a premium of 53 cents each. The gross premium pocketed by this investor amounts to 1.03 on the trade. Thus, it appears that this trader does not see much by way of recovery for Oracle in the next couple of months, rather seeks experience maximum retention of the 1.03 premium if shares remain within the borders set by the April strikes selected. If shares were to swing outside the strikes, this investor would experience losses beginning at $12.97 on the downside and at $19.03 on the upside. Looking past April showers, a number of bulls were observed scooping up calls in June. Purchases were made at a number of strikes and settled as far up as the June 22 strike price, where 6,000 calls were bought for 15 cents…
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Kimble Charting Solutions

Dow Theory Concerns? Transportation Stocks Make New Lows

Courtesy of Chris Kimble.

The bull market is experiencing its first real test since the 2014/2015 stock market correction. Volatility is high and key sectors are heading lower.

One such sector is the Transportation Sector(NYSEARCA: IYT) and select stocks.

The age-old Dow Theory call for the Industrials and Transports to lead the market (and confirm each others moves). Currently, both are struggling. But the Dow Transports are on the precipice of a major breakdown. Looking at the chart below, you can see that the Transportation Sector ETF (IYT) is attempting to break down below its 12-month trading range and 9-year rising support line.

If the market doesn’t reverse higher soon, this break down will send a negative message to investors about the economy… and the broader stock market.

A move lower wou...



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Phil's Favorites

The NRA's financial weakness, explained

 

The NRA's financial weakness, explained

Political clout doesn’t guarantee a healthy bottom line. AP Photo/Evan Vucci

Courtesy of Brian Mittendorf, The Ohio State University

The National Rifle Association’s political spending fell during the 2018 midterm elections. There’s talk of ending small perks like free coffee at its offices and even ...



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Zero Hedge

Attention US Millennials: Japan Is Now Giving Away Free Houses

Courtesy of ZeroHedge. View original post here.

There are over 8 million abandoned homes in Japanese suburbs, according to The Japan Times. 

If you are a struggling American millennial: you could theoretically move to Japan because the sushi’s fresh, cost of living is low, and the government is giving away free homes. 

What is driving the government to give away these homes? Well, there is a mass...



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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga.

  • Data on retail sales for November will be released at 8:30 a.m. ET.
  • Data on industrial production for November will be released at 9:15 a.m. ET.
  • The flash Composite Purchasing Managers' Index for December is schedule for release at 9:45 a.m. ET.
  • Data on business inventories for October will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the recent week is schedule for release at 1:00 p.m. ET.

Posted-In: Economic DataNews Economics ...



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Biotech

Those designer babies everyone is freaking out about - it's not likely to happen

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

 

Those designer babies everyone is freaking out about – it's not likely to happen

Babies to order. Andrew crotty/Shutterstock.com

Courtesy A Cecile JW Janssens, Emory University

When Adam Nash was still an embryo, living in a dish in the lab, scientists tested his DNA to make sure it was free of ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

...

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Chart School

Weekly Market Recap Dec 09, 2018

Courtesy of Blain.

Bears are certainly showing the type of strength we haven’t seen in a long time.   A week ago at this time futures were surging on news of a “truce” for 90 days between China and the U.S. in their trade spat.  But the charts were still not saying lovely things despite a major rally the week prior.   And by Tuesday, darkness had descended back on the indexes, with another gut punch Friday.    A lot of emphasis was put on a long term Treasury yield dropping below a shorter term Treasury.

On Monday, the yield on five year government debt slid below the yield on three year debt, a phenomenon which has p...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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...



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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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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:

 

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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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