Posts Tagged ‘STT’

Options Volume Pops At Urban Outfitters As Shares Hit Fresh 52-Week High

 

Today’s tickers: URBN, STT & SNDK

URBN - Urban Outfitters, Inc. – Shares in Urban Outfitters gained the most in the S&P 500 Index on Tuesday morning after the operator of retail brands Free People, Anthropologie and Urban Outfitters, posted better-than-expected second-quarter earnings and sales. The positive earnings surprise and an upgrade to ‘Outperform’ from ‘Market Perform’ at William Blair & Co. sparked a more than 20% rally in the price of the underlying at the open to a new 52-week high of $37.65. Options traders positioning for further upside in the near term picked up out-of-the-money call options in the first hour of the session. The front month options are the most actively traded contracts on Urban at present. Volume is heaviest in the Sep. $37 strike call, where more than 1,700 lots changed hands against open interest of just 72 contracts. Buyers in the early going paid an average premium of $1.15 per contract for nearly 500 hundred of the $37 strike call options, while the bulk of the volume traded to the middle of the market. Several hundred upside call options were also purchased at the Sep. $38, $39 and $40 strikes, indicating some strategists are positioning for shares in the specialty retailer to extend gains during the next four weeks to expiration. Traders paid an average premium of $0.20 per contract for around 400 of the Sep. $40 strike calls. The bullish stance may pay off at expiration in the event URBN shares surge 7% over today’s high of $37.65 to top the average breakeven point at $40.20, the highest level for the stock since April 2010. All told, more than 20,000 options are in play on Urban Outfitters as of 11:45 a.m. New York time, roughly five times the stock’s average daily options volume of 4,060 contracts.

STT - State Street Corp. – The provider of investment management services popped up on our scanners early in the trading session after…
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Testy Tuesday – Have the Markets Become Comfortably Numb?

"There is no pain you are receding
A distant ship's smoke on the horizon.
You are only coming through in waves.
Your lips move but I can't hear what you're saying.
When I was a child
I caught a fleeting glimpse
Out of the corner of my eye.
I turned to look but it was gone
I cannot put my finger on it now
The child is grown,
The dream is gone.
but I have become comfortably numb
." – Pink Floyd
 

I have a theory that the markets (and the American people in general) aren't irrational, they are simply shell-shocked after suffering a very traumatic group financial experience… 

To be shell-shocked is to be "mentally confused, upset, or exhausted as a result of excessive stress" and the most common symptoms are: Fatigue, slower reaction times, indecision, disconnection from one's surroundings, and inability to prioritize – That certainly sounds like our Congress doesn't it?  Combat stress disorder was first diagnosed in WWI, when 10% of the troops were killed and 56% wounded – far worse than had been experienced in previous wars.  Our current financial crisis has similarly affected more people than any previous crisis with almost everyone knowing someone who is bankrupt or lost their jobs or homes and almost no one escaped the carnage of the downturn without some financial damage. 

Combat fatigue may go a long way to explaining the severe drop-off in volume that has plagued the markets since March, with participation now down to 25% of where we were last January and that leaves us open to the blatant sort of market manipulation that Karl Denninger caught last week as well as the usual nonsense we get daily from HFT programs that drive the market with such precision that we are able to tell how the day is going to go by simply checking our hourly volume targets.  Here's a clip from CNBC where a floor trader discusses market manipulation as a fact of trading (2 mins in).  

As Nicholas Santiago points out on In The Money Stocks,   "January is usually a very high volume month, yet it has started off the New Year even lighter than the last two months of 2009.  Light volume markets are very difficult to
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Bank of America Bearish Option Position Closed – Shares Rally

Today’s tickers: BAC, MCD, ADM, XRT, CVS, STT, PFE, CVS, FSYS & AEO

BAC – Bank of America Corp. – One investor banked profits today by unraveling a massive bearish credit spread established back on October 28, 2009. The trader’s decision to take profits ahead of expiration could be a bullish sign for BAC. Shares are trading up 2% near the end of the trading day to stand at $15.00. The investor originally sold approximately 130,000 calls at the November 16 strike for an average premium of 49 cents apiece, spread against the purchase of the same number of calls at the higher November 17.5 strike for 15 cents each. The trader received a net credit of 34 cents per contract on the transaction. Today, the investor left money on the table by closing out ahead of expiration. It appears he sold the upper strike calls for 4 pennies and bought back the lower strike calls for 19 cents apiece. Net profits received for unraveling the spread amount to 19 cents per contract for a total of $2.47 million. One might interpret such a decision as a bullish signal for BAC because the trader decided to walk away with 19 cents – half of the maximum profit potential of 34 cents. The investor would only have been able to retain the full 34 cents if shares traded beneath $16.00 through expiration day in November.

MCD – McDonald’s Corp. – A bullish risk reversal in the January 2010 contract significantly reduced the price paid by one investor establishing an optimistic stance on the fast-food chain. Shares of MCD are trading 1.5% higher today to $61.20 despite yesterday’s downgrade to ‘hold’ by analysts at EVA Dimensions. The investor sold 13,000 put options at the January 60 strike for an average premium of 1.91 apiece to partially offset the cost of purchasing 13,000 in-the-money calls at the same strike for 2.51 each. The net cost of the reversal amounts to 60 cents per contract.

ADM – Archer Daniels Midland Co. – Food products company, Archer Daniels Midland, jumped onto our ‘most active by options volume’ market scanner this afternoon due to bullish activity in the March 2010 contract. Shares edged 0.5% higher to $32.37 during the trading session after the firm revealed better-than-expected first-quarter profits of 77 cents per share. One investor sold out-of-the-money put options to partially finance the purchase of a…
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Bullish Option Play at State Street Despite Weaker Shares

Today’s tickers: STT, HPQ, AMAT, PBR, BYD, AMD, VALE & ITUB

STT– The 1% decline in State Street’s shares to $43.75 today has not deterred one investor from enacting a bullish ratio call spread in the July contract. Hoping for a nearer-term rally in the stock, the trader bought 5,000 calls at the July 44 strike price for 4.70 each and sold 10,000 calls at the higher July 50 strike for an average premium of 2.20 apiece. The spread cost the investor just 30 cents (1*4.70 – 2*2.20 = 0.30) and yields a maximum potential profit of 5.70 if shares were to climb to $50.00 by expiration. The stock need only rise about 55 cents from the current value to surpass the breakeven point for the trade at $44.30. – State Street Corp.

HPQ – Shares have remained relatively flat today and are currently at $34.45. Our attention was drawn to two trades that appear to be covered calls initiated by investors looking for bullish movement in the stock. The first of the two transactions was the work of a nearer-term HPQ-optimist who looks to have purchased shares of the underlying stock and simultaneously written about 5,000 calls at the July 38 strike price for a premium of 55 cents each. This tactic limits potential gains for the investor but in return effectively reduces the price per share to $34.20 (assuming a purchase price of $34.75) and also provides an exit strategy should the July 38 calls land in-the-money by expiration. If the underlying shares are called away at expiration the trader will have realized total gains of 11%. The other covered-call-cohort we observed on HPQ targeted the August 40 strike price and wrote about 4,500 calls for a premium of 63 cents each. This individual effectively reduced the price of the underlying shares to approximately $34.19 (assuming a purchase price of $34.82) by writing the call options. The investor will bank gains of 17% on the trade if HPQ rallies through $40.00 and the underlying shares are called away from him at expiration in August. – Hewlett-Packard Co.

AMAT– The manufacturer and marketer of integrated circuit fabrication equipment for the global semiconductor industry, has experienced a more than 3% rally in shares to $11.30. Option traders drove the call-to-put ratio up to 11.18 indicating that more than 11 call options were traded for each put option on the
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Emerging Markets ETF sees option traders locking into strong rally

Today’s tickers: EEM, VALE, CSCO, ALL, IBN, STT & XLE

EEM– Shares of the emerging markets ETF have jumped 5% today to stand at $31.58. Ignoring the current bullish movement in the underlying share price, one option trader looked to the December contract to initiate a ratio put spread in the expectation that shares may decline by expiration. The investor established the trade by purchasing 5,000 puts at the December 31 strike price for 3.71 each spread against the sale of 10,000 puts at the December 25 strike for a premium of 1.51 apiece. The net cost of the transaction amounts to 69 cents and yields a maximum potential profit of 5.31 to the trader if shares were to fall to $25.00 by expiration. – iShares MSCI Emerging Markets Index ETF

VALE– The metals and mining company has experienced a share price rally of more than 6% to $18.49 amid reports from Vale’s CEO, Roger Angelli, that the company will likely invest $10.5 billion down from the previous estimate of $14 billion due to lower costs and a weaker Brazilian real. Option traders expressed mixed sentiments in the near-term June contract where the majority of option contracts exchanged hands. One investor got long of some 18,000 puts that appear to have been purchased for about 25 cents each at the June 15 strike price. Perhaps he is long the stock and is looking to protect his position from potential erosion of the share price through the breakeven point on the trade at $14.75. The in-the-money June 18 strike price saw 9,000 calls sold for an average premium of 1.17 apiece. It is possible that investors are selling premium on the share price rally and, like the put-buying bear above, see shares giving back gains by expiration. Traders will retain the full premium enjoyed on the sale if the June 18 calls land out-of-the-money by expiration. We note the possibility that approximately 7,500 of the calls sold at the June 18 strike price are part of a covered call by an investor who bought the stock and sold the calls to effectively lower the price paid per share by 1.17. If this is the case, the trader will have the underlying shares called away from him if the calls remain in-the-money and are exercised by expiration. – Companhia Vale do Rio Doce ADS

CSCO – Networking and communications products manufacturer
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Stress-Free Investing In Stress-Tested Banks

Finally the official results are in!

Oddly enough, it was MUCH worse than the original indication that started this leg of our rally when we were told that every bank passed the stress test but the results were skillfully leaked in dribs and drabs interspersed with rumors that things were much worse in such a way that there is a general sense of relief that "only" $75BBn of additional capital must be raised and almost half of that by Bank of America, where $34Bn represents just 2% of their assets (although it is 40% of their current market cap). 

 

While that level of dillution will keep us out of BAC for now, there's no reason to not invest in C, who "only" need $5.5Bn against their $2Tn in assets although that is still 25% of their current market cap.  For the banks that do need capital, they have until June 8th to present a plan for raising it and until November 9th to implement the plan, which must maintain the target capital ratios through December 2010 after which we can assume they will again be allowed to run wild.  The banks are all coming up with various schemes to raise cash but the ones on the left need none at all.

Rather than go into a huge explanation about each pick, I'll just say that I'm favoring banks that I feel have room to run and have not already been overbought.   I discussed with members yesterday that it is ridiculous to assume that banks will get back to their 2007 levels as those earnings came under unique and ideal market conditions which are not likely to be repeated in the next decade so I was disgusted with Cramers BUYBUYBUY rant on the banks last night and I'm looking for a far more conservative play and we will be shorting some of the high flyers as Cramer herds his sheeple into overvalued positions.

[Commentary]We got out of our bullish bank plays this week and our $100K Hedged Virtual Portfolio, which was focused on financials in round 1, made huge gains and we (contrary to Cramer's advice) took them off the table.  Now that we have FACTS, we can reinvest with more confidence.  I am not advocating jumping into all of these…
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Zero Hedge

BofA's "Charts Of Darkness For Apocalypse Dow"

Courtesy of ZeroHedge. View original post here.

With just 42 days trading days left until the S&P500 bull market becomes the longer of all time, Morgan Stanley's chief cross-asset strategist, Andrew Sheets, writes that investors are now more sanguine about how much time they have until the next recession than at any point since 2010. "We’re 8 ½ years into an expansion, and many investors finally are finally confident that there is plenty of time left on the clock." Sheets also notes that in client conversations, China is rarely mentioned as a growth concern (after causing angst for much of this period). All this is taking place against a backdrop in which key market elements are ...



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Chart School

Semiconductors Accelerate Losses

Courtesy of Declan.

There was no real change on the end-of-week position of markets. The Semiconductor Index was the most active with an undercut close of the week's swing low Next support level is the 50-day MA.


Despite the swing low undercut in the Semiconductor Index there were no breakout reversals for the Nasdaq or Nasdaq 100; indeed, the weakness may be viewed as a buying opportunity with a test of support.

...

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Phil's Favorites

Will Disney's Epic Buyout Of Fox Mark The End Of The Everything-Bubble?

Courtesy of John Rubino, DollarCollapse.com

As bubbles expand and hot money starts burning holes in corporate pockets, merger and acquisition deal terms begin to leave reality behind. Often one deal of such breathtaking size, scope and hubris is struck that - in retrospect – it heralds the end of the era.

The junk bond bubble of the 1980s, for instance, hit its apex with the December 1988 leveraged buyout of processed food conglomerate RJR Nabisco, which featured a prolonged bidding war by a Who’s Who of the corporate raider/LBO community. At $25 billion, it was seen as “staggering” at t...



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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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Digital Currencies

Crypto-Collapse Resumes After Japan's Largest Exchange Halts Account Creation

Courtesy of ZeroHedge. View original post here.

What started off as a hopeful week of broadening user adoption is ending on a sour note as Japan's chief regulator launched a probe of crypto-exchanges, prompting the largest to halt account creation sending the entire crypto space lower...

As CNBC reports, the order...



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Insider Scoop

Booking Holdings Is Playing Catch-Up In Online Travel Growth Areas, Analyst Says In Downgrade

Courtesy of Benzinga.

Related Benzinga's Top Upgrades, Downgrades For June 22, 2018 Booking Holdings CEO Has Some Winning Travel Tips For ...

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Biotech

Opioids don't have to be addictive - the new versions will treat pain without triggering pleasure

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Opioids don't have to be addictive – the new versions will treat pain without triggering pleasure

shutterstock.

Courtesy of Tao Che, University of North Carolina – Chapel Hill

The problem with opioids is that they kill pain – and people. In the past three years, more than 125,000 persons died from an opioid overdose – an average of 115 people per day – exceeding the number killed in ...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

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Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

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:

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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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