Posts Tagged ‘SLXP’

Put Spread Eyes Sharp Pullback In CAT Shares

Today’s tickers: CAT, PANL, LIFE & SLXP

CAT - Caterpillar, Inc. – The machinery maker’s shares may surrender much of the gains posted during the October rally, according to one bearish strategy initiated in the December contract this morning. Shares in Caterpillar are in the red this afternoon, along with all of the other Dow 30 names, to trade 3.5% lower at $92.50 as of 12:45 pm ET. It looks like one investor initiated a roughly 3,000-lot bearish put spread, buying the Dec. $90 puts, and selling the same number of Dec. $75 options, for an average net premium outlay of $3.07 per contract. The trader may profit at expiration next month if CAT’s shares fall 6.0% to breach the average breakeven price of $86.93. The investor may pocket maximum potential profits of $11.93 per contract should shares Caterpillar plunge 18.9% to trade below $75.00 at December expiration day. CAT’s shares last traded below $75.00 back on October 7. The stock presently trades 37.0% higher than its October 4 52-week low of $67.54.

PANL - Universal Display Corp. – Shares in Universal Display Corp. rallied as much as 11.75% to an intraday high of $55.25 after the company posted better-than-expected third-quarter earnings. The provider of components and technologies used in the production of flat-panel displays earned $0.12 a share, excluding some items, which beat the average expectation that the firm would break even for the quarter. Shares in PANL are off their highs off the morning to stand 8.2% better on the day at $53.49 as of 11:25 am ET. One options player appears to be positioning for shares in Universal Display Corp. to continue to climb through November expiration. It looks like the investor purchased a 1,000-lot Nov. $55/$60 call spread at a net premium of $2.10 per contract. Profits are available on the spread should PANL’s shares rally another 6.7% to surpass the effective breakeven price of $57.10. The bullish trade yields maximum potential profits of $2.90 per contract to the investor in the event that shares in Universal Display surge 12.2% over the current price of $53.49 to trade above $60.00 at expiration. Options implied volatility on the stock is down 20.1% to arrive at 81.9% in the first half of the session.

LIFE - Life Technologies Corp. – Put options on biotechnology company Life Technologies Corp. are more active than usual this morning. Shares in the name are down better than 3.0%…
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Bearish Plays Pile Up at Salix Pharmaceuticals

 Today’s tickers: SLXP, UTHR, XLB & XLE

SLXP - Salix Pharmaceuticals, Inc. – Put options are popular at Salix Pharmaceuticals today with shares in the drug maker trading 2.5% lower on the session at $40.38 in early afternoon trade. A delta neutral transaction involving March contract put options tied to activity in SLXP shares indicates one strategist expects the price of the underlying to slip further in the next couple of months. Salix reports fourth-quarter earnings after the final bell on March 7, 2011. The options trader appears to have purchased 280,000 shares in the drug maker at $41.55 each, and purchased 10,000 puts at the March $37 strike for a premium of $2.80 apiece, on a 0.28 delta. The parameters of the transaction are such that the investor could make out well on the position given sufficient moves in the price of SLXP shares in either direction. The long stock leg of the trade will rise in value if shares reverse course and appreciate enough to at least cover the cost of buying the put options. But, it is the substantial stake in long puts that are likely to yield more substantial gains for the trader given continued bearish movement in the price of the stock. The value of the puts will grow quickly enough, under the appropriate circumstances, to more than offset losses realized on the declining value of the shares. The huge jump in demand for Salix put options helped lift the stock’s overall reading of options implied volatility 42.7% to 79.71% just before 1:00pm in New York. It looks like other pessimistic players are purchasing the March $35/$40 put spread for an average premium of $2.05 per contract. Investors initiating debit spreads make money if SLXP shares drop 6.0% from the current price of $40.38 to breach the average breakeven point on the downside at $37.95 by March expiration day.

UTHR - United Therapeutics Corp. – The biotechnology firm popped up on our ‘hot by options volume’ market scanner this morning due…
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Strangles and Straddles Pop Up in Mexico ETF

 Today’s tickers: EWW, JNPR, SLXP & HNZ

EWW - MSCI Mexico Investible Market Index Fund – Large prints in call and put options on the Mexico ETF caught our eye this morning with shares in the EWW, an exchange-traded fund designed to correspond to the price and yield performance of publicly traded securities in the aggregate in the Mexican market, trading 0.55% lower on the session at $61.92 as of 12:30pm in New York. It looks like one or more big options traders sold a straddle in the front month and initiated a short strangle in the March contract. The straddle-strategist looked to the February $62 strike to sell 15,000 calls for a premium of $1.13 each, and sold the same number of in-the-money puts at that strike for a premium of $1.43 apiece. Gross premium pocketed on the transaction amounts to $2.56 per contract. The investor keeps the full amount of premium received as long as shares settle at $62.00 and both the call and put options expire worthless at expiration. Some portion of premium is safe in the investor’s wallet as long as shares in the EWW do not stray too far above or below the $62.00 level. But, the short stance in both call and put options at that strike expose the trader to losses in the event that shares rally above the upper breakeven price of $64.56, or slip beneath the lower breakeven point at $59.44, before the options expire next month. In longer-dated options, a sizeable 7,000-lot strangle involving March $61 strike puts and March $63 strike calls was sold for a gross premium of $3.16 per contract. The investor responsible for the strangle walks away with the full amount of premium pocketed on the transaction if shares in the EWW trade within the boundaries of the strike prices described through expiration day in March. Premium received erodes down to zero and gives way to losses should shares in the ETF exceed the upper breakeven price of $66.16, or if shares trade below the lower breakeven point at $57.84, ahead of expiration in a couple of months time. Strangle and straddle sellers may benefit from subsiding levels of implied volatility as well as…
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Options Trader Constructs Bullish Risk Reversal on SandRidge Energy, Inc.

Today’s tickers: SD, DTV, YHOO, SLXP, MDVN, PDCO, XLE, LOW, AIG & CA

SD – SandRidge Energy, Inc. – A bullish risk reversal on natural gas and oil exploration and development company, SandRidge Energy, Inc., suggests one investor may be positioning for a rally in the value of the underlying shares by expiration in June. SandRidge’s shares slipped 0.50% during the session to stand at $8.52. The trader sold 10,000 put options at the June $7.5 strike for an average premium of $0.53 apiece in order to offset the cost of buying 10,000 calls at the higher June $9.0 strike for $0.90 each. The net cost of the reversal play amounts to $0.37 per contract. Shares of the energy firm must rally approximately 10% over the current day’s price in order for the trader to break even on the transaction at $9.37. Profits are available to the upside beyond the breakeven point at $9.37 through expiration day in June.

DTV – The DIRECTV Group, Inc. – Investors sold strangles on the subscription television services company today amidst a 0.55% rally in the price of the underlying stock to $33.83. The use of the short strangle strategy implies traders anticipate reduced volatility in the price of DTV shares and expect the share price to remain range-bound through expiration in June. Throughout the trading session options traders sold approximately 15,000 calls at the June $35 strike for an average premium of $1.77 apiece in combination with the sale of 15,000 puts at the lower June $30 strike for a premium of $0.78 each. Strangle-sellers pocket a gross premium of $2.55 per contract, which they keep if Directv’s share price trades within the range of $30.00 to $35.00 through expiration. The premium received on the transaction provides limited protection against losses should DTV’s shares swing outside of the strike prices described. Stranglers accumulate losses if shares of Directv trade above the upper breakeven price of $37.55, or if shares decline beneath the lower breakeven point at $27.45, by expiration day.

YHOO – Yahoo!, Inc. – The slight 0.15% decline in the price of Yahoo’s shares to $15.55 today did not some options traders from establishing bullish stances on the stock. One individual initiated a bullish risk reversal to position for a rebound in shares by expiration in January of 2011. The investor sold 15,000 put options at the January 2011 $15 strike for…
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Phil's Favorites

Scarcity Cred

 

Scarcity Cred

Courtesy of Scott Galloway, No Mercy/No Malice@profgalloway

Any firm that approaches $1T in value has tapped into a basic human instinct. Consuming, signalling, loving, and praying have been the fuel of Amazon, Apple, Facebook, and Google’s ascents, respectively. That the crypto asset class universe has reached $2T reveals, I believe, that it taps into two attributes we instinctively pursue: trust and scarcity.

Trust

Our superpower as a species is cooperation, which requires trust. It’s the reason banks, tr...



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Zero Hedge

Canada's Green Shift Could Displace Three-Quarters Of Oil Workers

Courtesy of Charles Kennedy, OilPrice.com

Canada’s climate strategy to significantly cut emissions and become a net-zero emissions economy by 2050 will create a seismic shift in the large oil and gas sector, where up to three-quarters of the workers, or up to 450,000 people, are at risk of displacement, TD Bank said in a new report on Tuesday.

Canada aims to become a net-zero emissions economy within three decades, and to cut emissions by between 32 percent and 40 percent by 2030.

While those commitments could be critical to staving off the worst effects of gl...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The Biden Yellen team have made their play, and it is not US dollar friendly.

Janet Yellen speech named "International Priorities — Remarks to The Chicago Council on Global Affairs" (here) can be summed to (via Luke Gromen) :


The US is accelerating a move away from "subjugating the US middle and working class to support the USD", to "subjugating the USD to support the US middle and working classes".



Well the above is true, but as we all know large US deficits and the trend of the US dollar are joined at the hip, and that trend is down '...

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ValueWalk

2021 Sohn Investment Conference Featuring Einhorn, O'Shaughnessy And More

By Jacob Wolinsky. Originally published at ValueWalk.

The 2021 Sohn Investment Conference will be held virtually on May 12, 2021 and Valuewalk will be covering the event. Stay tuned for our in-depth coverage!

Q4 2020 hedge fund letters, conferences and more

Check out our coverage of the 2020 Sohn Hong Kong Conferences here.

All proceeds from The 2021 Sohn Investment Conference will be directed to Rockefeller University, which will provide unrestricted funding for scientists working on some of the highest-risk, highest-reward projects primed to advance the treatment of pediatric...



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Biotech/COVID-19

How worried should you be about coronavirus variants? A virologist explains his concerns

 

How worried should you be about coronavirus variants? A virologist explains his concerns

A COVID-19 patient in an ICU unit in a hospital in Capetown, South Africa, in December 2020. A variant emerged in South Africa that has since spread to other parts of the world. Other new variants could emerge elsewhere. Rodger Bosch/AFP via Getty Images

Courtesy of Paulo Verardi, University of Connecticut

Spring has sprung, and there is a sense of relief in the air. After one year of lockdowns and social distancing, mor...



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Politics

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

 

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

Russian police officers beat people protesting the jailing of opposition leader Alexei Navalny, Jan. 23, 2021 in Moscow. Mikhail Svetlov/Getty Images)

Courtesy of Shelley Inglis, University of Dayton

Russian dissident Alexei Navalny, sick with a cough and ...



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Kimble Charting Solutions

Gold; Load Up The Truck Upon Hitting This Level

Courtesy of Chris Kimble

Gold has created lower highs since peaking last summer. Is Gold near a low? Where would a nice entry point come into play?

This chart looks at Gold ETF (GLD) on a weekly basis over the past few years. GLD hit the top of this rising channel at (1) last summer, as it was above moving averages and relative strength was hitting lofty levels.

The decline over the past 7-months has GLD creating a death cross. Warren Buffett sold his Gold holding before this death cross took place!

Where would one want to pick up some GLD at a nice risk/reward price point?

If GLD reaches rising channel support at (2), w...



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Digital Currencies

How nonfungible tokens work and where they get their value - a cryptocurrency expert explains NFTs

 

How nonfungible tokens work and where they get their value – a cryptocurrency expert explains NFTs

NFTs can be used to prove who created and who owns digital items like these images by the artist Beeple shown at an exhibition in Beijing. Nicolas Asfouri/AFP via Getty Images

Courtesy of Dragan Boscovic, Arizona State University

Takeaways

· Nonfungible tokens prove ownership of a digital item – image, sound file or text – in the same way that people ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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Promotions

Phil's Stock World's Weekly Webinar - March 10, 2021

Don't miss our latest weekly webinar! 

Join us at PSW for LIVE Webinars every Wednesday afternoon at 1:00 PM EST.

Phil's Stock World's Weekly Webinar – March 10, 2021

 

Major Topics:

00:00:01 - EIA Petroleum Status Report
00:04:42 - Crude Oil WTI
00:12:52 - COVID-19 Update
00:22:08 - Bonds and Borrowed Funds | S&P 500
00:45:28 - COVID-19 Vaccination
00:48:32 - Trading Techniques
00:50:34 - PBR
00:50:43 - LYG
00:50:48 - More Trading Techniques
00:52:59 - Chinese Hacks Microsoft's E...



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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.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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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. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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