Shutterfly Shares Shoot Higher After Earnings
by Option Review - February 6th, 2013 1:01 pm
Today’s tickers: SFLY, SU & SHS
SFLY - Shutterfly, Inc. – Options volume on Shutterfly jumped this morning and shares in the online photo-sharing services provider jumped nearly 20% to a new 52-week high of $40.20 after the company posted higher-than-expected fourth-quarter revenue and forecast annual sales above average analyst expectations. Traders positioning for shares in Shutterfly to extend gains in the near term snapped up February expiry calls on the stock today. Upwards of 1,100 calls have changed hands at both the Feb. $40 and $42.5 striking prices as of 11:40 a.m. ET, and it looks like much of the volume was purchased in the early going at average premiums of $0.96 and $0.39 apiece, respectively. Call buyers may profit at expiration next week if SFLY’s shares increase another 1.9% and 6.7% to exceed average breakeven prices of $40.96 and $42.89. Bullish positions established ahead of Shutterfly’s fourth-quarter earnings report fetched hefty overnight paper profits forsome options players today. Traders who yesterday purchased around 300 calls at the Feb. $32.5 strike for an average premium of $1.88 each, today find these contracts have quadrupled in value, changing hands at a premium of $7.60 apiece, just before midday in New York. Roughly 250 calls were picked up at the Feb. $37.5 strike on Tuesday for an average premium of $0.37 per contract. Traders long the $37.5 strike call options today hold contracts that have increased eight-fold overnight to $3.10 each as of last check on Wednesday morning at 11:50 a.m. ET. Overall options volume on Shutterfly is approaching 10,600 contracts, a big jump versus the stock’s average daily options volume of around 1,140 contracts.
SU - Suncor, Inc. – Shares in Suncor, the largest Canadian energy company by market value, dropped 5.7% today to $32.55 after the company posted a first quarter loss on Tuesday after the close. Options volume on Suncor today is nearly five times greater than average, with more than 25,500 contracts in play on the stock versus average daily options volume of 5,670 contracts. The bulk of the volume is changing hands…
 Twitter
|
LinkedIn
|
 del.icio.us
|
|
Bullish Plays Crop Up In Consumer Staples ETF Call Options
by Option Review - April 17th, 2012 2:09 pm
Today’s tickers: XLP, WMT & SFLY
XLP - Consumer Stapes Select Sector SPDR Fund – Options activity on the Consumer Staples SPDR in the first 10 minutes of the session suggests one strategist is long-term bullish on shares in some of the largest and most well-known U.S. companies. Shares in the XLP are up 1.0% today at $34.11, just off the ETF’s record high of $34.42, as U.S. equities move broadly higher. The XLP’s top 10 holdings, which make up nearly 70% of the fund, include Dow heavyweights the likes of Procter & Gamble, Coca-Cola and Wal-Mart Stores. Coca-Cola, the fund’s second-largest holding, is up nearly 3.0% this afternoon after the Company reported better-than-expected first-quarter results. The long-dated options position established on the ETF this morning stands to benefit from substantial bullish movement in the price of the underlying over the next year and eight months to expiration. It looks like the trader responsible for the transaction purchased a block of 10,000 calls at the Jan. 2014 $37 strike for a premium of $0.89 apiece. Profits are available on the position at expiration if shares in the XLP climb 11.0% to top a new record high of $37.89. A couple of hours into the trading day the same-strike call expiring in January 2013 was purchased 26,600 times at a premium of $0.23 each.
WMT - Wal-Mart Stores, Inc. – The value of a sizable bullish bet initiated in Wal-Mart call options yesterday ballooned overnight, as shares in the retailer extend their run to the upside for a second straight day. Shares in WMT are currently up 2.05% at $61.81 as of 11:35 a.m. in New York, the highest since mid-February, on positive U.S. same-store sales data. On Monday, WMT popped up on our market scanners after a large…
|
Twitter
|
LinkedIn
|
del.icio.us
|
|
Traders Take To Joy Global Call Options
by Option Review - April 10th, 2012 2:07 pm
Today’s tickers: JOY, SFLY & PFE
JOY - Joy Global, Inc. – Shares in mining equipment maker, Joy Global, rallied as much as 3.2% at the start of the session to $75.18, but the stock has since slipped into negative territory, trading down 0.50% to stand at $72.51 as of 12:50 p.m. in New York. Call buying on JOY this morning indicates traders are gearing up for shares in the Milwaukee, Wisconsin-based Company to increase in the near term. Weekly calls and front month calls saw the most action today before the stock surrendered gains to join in on the broad market decline. In-the-money $70 strike weekly calls changed hands 1,000 times for an average premium of $3.89 apiece, and appear to have been purchased by traders expecting shares to top $73.89 at expiration. Call buyers also targeted the $75 and $77.5 strike weekly options, snapping up more than 400 lots at each strike at average premiums of $1.66 and $0.32 each, respectively. Front month calls were most active at the April $80 strike, where more than 4,650 contracts traded against open interest of 3,935 positions. It looks like the majority of the contracts were purchased for an average premium of $0.47 apiece, thus positioning buyers to make money should Joy Global’s shares jump 11.0% to exceed the average breakeven price of $80.47 at expiration next week.
SFLY - Shutterfly, Inc. – The selloff in shares of Shutterfly continued for a second-straight day on news Facebook will pay roughly $1 billion to buy Instagram’s photo-sharing application. SFLY’s shares are 4.4% lower today to stand at $26.98, but have lost 60.0% of their value in the past 52 weeks since reaching an all-time high of $66.70 back on April 28, 2011. Some traders appear to be positioning for the…
|
Twitter
|
LinkedIn
|
del.icio.us
|
|
Options Trader Positions for Airline Recovery Story
by Option Review - February 24th, 2011 4:24 pm
Today’s tickers: UAL, HBI, SFLY & TOL
UAL - United Continental Holdings, Inc. – The airline operator’s shares rose 4.3% this morning to an intraday high of $23.76, rebounding 9.7% off of its lowest point of the week at $21.65, but still trading substantially lower than last week’s closing price of $27.02. Shares relinquished some of the earlier gains this afternoon to stand 1.65% higher on the session at $23.16 as of 12:15pm in New York. At least one options strategist is positioning for UAL’s shares to continue recovering in the next couple of months. It looks like the investor employed April contract ratio call spreads to prepare for a sizable, albeit limited, correction higher by expiration day. The trader appears to have purchased approximately 3,000 in-the-money calls at the April $22 strike for an average premium of $2.49 apiece, and sold roughly 6,000 calls up at the April $27 strike for an average premium of $0.52 each. The net cost of the transaction amounts to an average of $1.45 per contract, and positions the trader to profit in the event that UAL’s shares rally 1.25% over the current price of $23.16 to surpass the average breakeven point on the upside at $23.45 by April expiration. Maximum potential profits of $3.55 per contract are available to the trader should shares in United Continental Holdings jump 16.6% to settle at $27.00 at expiration in a couple of months. The sale of twice as many higher-strike call options expose the investor to losses should the stock fly higher than he expects within the time remaining to expiration. Profits give way to losses on this strategy if shares in UAL jump 31.9% to exceed the upper breakeven price of $30.55 by April expiration day. The call options transacted in the ratio spreads represent opening positions given the minimal levels of open interest observed at either strike price.…
|
Twitter
|
LinkedIn
|
del.icio.us
|
|
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
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...
Ilene is editor and affiliate program
coordinator for PSW.
