Posts Tagged ‘VMW’

Options On VeriFone Eye Further Weakness As Stock Tumbles To Multi-Year Low

Today’s tickers: PAY, SWK & VMW

PAY - VeriFone Systems, Inc. – Shares in electronic payment systems and services provider, VeriFone, are getting slammed on Thursday after the company yesterday forecast third-quarter revenue and earnings well below average analyst estimates. The stock dropped nearly 20% today to $17.70, the lowest level since May of 2010. Shares are currently down 18% on the day at $18.00 as of 11:45 a.m. ET. Traders positioning for shares in VeriFone Systems to extend losses in the near term picked up June and July expiry put options this morning. Put buying at the Jun $16 and $17 strikes position traders to profit from further selling pressure in the shares ahead of expiration in two weeks. It looks like bears purchased around 200 of the Jun $16 strike puts for an average premium of $0.16 each and around 350 of the Jun $17 strike puts at an average premium of $0.37 apiece. Meanwhile, sizable volume in the July expiry puts appears to be the work of one or more traders taking profits and initiating fresh bearish positions on the stock. More than 2,000 puts changed hands at the Jul $23 strike against open interest of 4,106 contracts in the early going this morning. Open interest in the $23 puts increased during the first half of this week, with around 2,500 lots purchased on Monday and Tuesday for an average premium of $1.63 each, according to time and sales data. The sharp drop in the price of the underlying overnight now finds the deep in the money put options changing hands at $4.90 apiece as of midday in New York. Prints in the $23 puts within 10 minutes of the opening bell today indicates traders sold more than 1,400 of the puts for an average premium of $4.55 apiece. Finally, bears anticipating continued weakness in the price of the underlying going forward snapped up 2,000 puts at the Jul $18 strike for an average premium of $1.20 each. Buyers of these contracts stand ready to profit at expiration next month should shares in VeriFone decline another 6.7% from the current level of $18.00…
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Starwood Hotels Call Options Heat Up As Shares Extend Gains

 

Today’s tickers: HOT, VMW & ANR

HOT - Starwood Hotels & Resorts Worldwide, Inc. – Upside call buying on one of the world’s largest hotel and leisure companies today indicates some options traders are positioning for shares in Starwood Hotels & Resorts Worldwide to continue moving higher during the next couple of weeks. Shares in Starwood are up better than 2% this afternoon to stand at $54.09 as of 12:25 p.m. ET. The stock has been trending higher in recent weeks, up 7.7% since mid-November, following a sharp 18% pullback from a six-month high of $61.09 in September down to as low as $50.42 on November 15th. Options players preparing for shares in Starwood Hotels to continue to gain ground in the near term purchased 2,000 calls at the Dec. $55 strike for an average premium of $0.30 apiece. Call buyers may profit at expiration in the event that HOT’s shares rally another 2.2% over the current price of $54.09 to exceed the average breakeven point at $55.30 at December expiration. Overall options volume on the stock today is noteworthy, with nearly 9,000 contracts in play versus the Starwood’s average daily options volume of around 2,300 contracts. The bulk of the trading traffic is in upside calls, driving the call-to-put ratio up to 19-to-1 in the first half of the trading session.

VMW - VMware, Inc. – Shares in the provider of cloud infrastructure solutions are moving higher on Thursday, currently up 1.6% on the day at $91.76 just after midday on the East Coast. Bursts of front-month put buying on VMware this morning suggests one or more strategists may be locking in recent gains in the price of the underlying. Shares in the name have increased roughly 13% since the end of October. Volume in VMW options is heaviest at the Dec. $85 strike, where upwards of 5,500 puts changed hands against open interest of 1,869 contracts. It looks like most of the volume was purchased at the start of the session for an average premium of $0.95 apiece. Put buyers may be hedging long…
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Fickle Friday – Google Goes Down as Costs Inflate

Well who’d have thunk it? 

The cost of doing business is rising and GOOG happens to be one of those businesses that lacks pricing power as their rates are generally set through an auction process and their users have to VOLUNTEER to pay more money to advertise.  Most advertisers on Google are on fixed budgets, like MSM advertisers and Google has done a great job of replicating that model.  Why then, should it be surprising if a maturing Google begins to look more like a traditional media outlet than a dot com company with exploding growth?  

Don’t get me wrong, we love Google long-term but we did short them as well as BIDU into Google earnings as we felt Google would disappoint enough to spook BIDU investors as well.  We’re taking the short money and running and looking for some bullish plays now – the drop from $630 last month to $545 today is plenty of froth blown off the top for us to get long-term interested again.  As you can see from the tag cloud of the Conference Call, growth is still there, especially in mobile display ads (Android a bit disappointing) and no major negatives.  I’m not going to write a whole thing about GOOG though, there are thousands of people doing that and our Members know well enough where I stand.  I’m more interested in examining the bigger picture.  

We expected Q1 earnings to be rough and we’ve already seen FDX, NKE, ORCL, RIMM, FAST, FCS and AA struggle so hopefully you don’t have to be hit on the head with another whole week of earnings before you get a little more cautious.  Next week we hear from C, HAL, LLY, TXN, BK, GS, INTC, IBM, SYK, USB, VMW and YHOO on Monday and Tuesday and then we’re off to the races with hundreds of companies reporting each week for the rest of the month.  Our job in the first few weeks of earnings season is to get a feel for the quarter and, so far, that feeling is rough.  

It’s all about inflation, of course and don’t say we didn’t warn you about that one!  We went more  bearish up at those 100% lines we’ve been watching and now the question really is – how bad was it?  Inflation is, after all, our long-term BULLISH premise.  We don’t think corporations
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Monday Market Movement – Do or Dive!

Big week ahead!  

$30Bn in POMO from the Fed runs headlong into earnings reports from 15 of the 30 Dow components along with MoMo darlings like VMW (tonight), BLK (tomorrow morning), POT (Thursday morning) and AMZN (Thursday night).  I already sent out an Alert to Members this morning outlining our strategy and Stock World Weekly did it's usual amazing job of wrapping up last week's action and laying out the week ahead so I won't be too redundant here.  The key driver for the markets continues to be the dollar, which is making more sense now as it saved the Dow and the S&P last week (50% of revenues come from overseas) but not the Russell (only 10% of revs from overseas) or the Nasdaq (30%).   

The Dollar was relentlessly driven down last week, bottoming out at 78 on Friday evening, back to November lows, where they ditched the Dollar all the way down to 75.63 in early November before it broke back up and ran to 81.44 on the last day of the month.  Now we're back down 4.2% from the Thanksgiving highs for the Dollar and the Dow and S&P are up 8%, which is our usual 2:1 correlation yet Uncle Rupert's Journal would have you believe that the Dollar no longer matters and that this rally is about (please sit down, PSW cannot be responsible for any beverages you are about to spit on your keyboad) – wait for it – Fundamentals!  

According to the Journal:  In recent weeks, for example, moves in stocks and the U.S. dollar have had little connection—a breakdown of the trend during much of 2010, when they were virtual mirror images of each other. Stocks were considered risky and would rise when investors were feeling confident, while the dollar was a haven, benefiting when investors were worried.  Commodities, too, have broken away from rising and falling with risk perceptions. Now more old-fashioned concerns, like the weather, are having an impact. Corn, soybean and wheat prices jumped this month after supply estimates were cut due to dry weather in South America and floods in Australia.

Really?  So the run in DBA from 22.85 in June of last year to 31.65 (38.5%)…
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Goldman-Bulls Foresee Greener Pastures by July

Today’s tickers: GS, AMLN, LYV, KFT, PM, IYR, MAS, VMW, BKS & CAL

GS – Goldman Sachs Group, Inc. – Option traders assumed medium- and long-term bullish stances on the global investment banking and management firm today to position for a rebound in shares in the next six to twelve months. Shares edged 1.65% lower during the session to stand at $152.43 as of 2:45 pm (EDT). One optimistic individual sold 2,500 put options for a premium of $8.90 apiece at the July $140 strike in order to finance the purchase of 2,500 calls at the higher July $175 strike for about $6.10 each. The trader receives a net credit of $2.80 per contract on the risk reversal play, and keeps the full amount as long as Goldman’s shares trade above $140.00 through expiration in July. Additional profits amass if the stock price jumps 15% over the current price to surpass the $175.00-level by expiration. Longer-term optimism appeared in the January 2011 contract where another Goldman-bull purchased a call spread. The investor bought approximately 2,300 call options at the January 2011 $160 strike for an average premium of $17.38 apiece, and sold the same number of calls at the higher January 2011 $195 strike for about $6.50 each. The net cost of the spread amounts to $10.88 per contract. Maximum potential profits of $24.12 per contract accumulate if Goldman’s shares surge 28% from the current price to $195.00 by expiration next January.

AMLN – Amylin Pharmaceuticals, Inc. – Shares of biopharmaceutical company, Amylin Pharmaceuticals, are up more than 11% to a new 52-week high of $19.39 in afternoon trading. The stock opened the session even higher at $19.97 on “optimism that the company’s new version of diabetes treatment Byetta will be approved following U.S. regulators’ clearance of a similar drug”, according to an earlier report by Elizabth Lopatto at Bloomberg. Option traders initiated bullish plays on the stock to position for upward movement in AMLN shares, which is likely to occur if the Food & Drug Administration approves the once-weekly version of Byetta, known as Byetta LAR. One investor established a bullish risk reversal by selling 10,000 puts at the February $17.5 strike for a premium of $0.50 each, spread against the purchase of 10,000 calls at the higher February $20 strike for $0.80 apiece. The net cost of the reversal amounts to $0.30 per contract and positions the trader…
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Regions Financial options remain bearish

Today’s tickers: RF, MSFT, F, VMW, FXI, AGN, WYE, XRT & COH

RF Regions Financial Corporation – The banking firm has slipped by more than 5% to $5.50 today, spurring option traders to heavily favor puts by a factor of four times to every call in action on the stock. We observed one investor looking to profit from further downward movement in shares by enacting a put spread in the near-term May contract. At the May 5.0 strike price he purchased 15,000 puts for an average premium of 50 cents apiece spread against the sale of 15,000 puts at the May 4.0 strike for 25 cents each. The net cost of the spread amounts to 25 cents and yields a maximum potential profit of 75 cents if shares decline all the way to $4.00 by expiration. He begins to garner profits to the downside beginning at the breakeven share price of $4.75. Another bearish trader targeted the now in-the-money May 6.0 strike price and appears to have bought 13,000 puts for an average premium of 1.05. Pessimism on the stock spread to the June 7.0 strike price where it appears that one investor sold 2,500 calls for 70 cents apiece in exchange for getting long 2,500 puts at the in-the-money June 7.0 strike price for 2.05 per contract. The net cost of the downside protection amounts to 1.35 and has already begun to amass profits for this investor as shares are currently below the breakeven point on the trade of $5.65.

MSFT Microsoft Corporation – Shares have dipped slightly by less than 1% to $18.65 ahead of its earnings conference call scheduled for 5:30 PM (EST) today. Street estimates place third quarter earnings at 39 cents per share. Our attention was drawn to one bullish investor looking to get long of call options in the October contract. It appears that this trader sold 5,113 puts at the October 16 strike price for a premium of 1.19 apiece in order to finance the purchase of 5,113 calls at the October 21 strike for 1.11 each. The investor has banked an 8 cent credit on the trade and is looking for shares to rally by about 13% by expiration in order to for the calls to land in-the-money, and for the premium on the calls to grow richer over time.

F Ford Motor Co. – Shares of the automotive company have…
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Zero Hedge

Italian Cases Soar Past 300 As EU Stubbornly Refuses To Close Borders; 10 Dead: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • WHO warns the rest of the world "is not ready for the virus to spread..."

  • CDC warns Americans "should prepare for possible community spread" of virus.

  • Italy cases spike to 322; deaths hit 10

  • HHS Sec. Azar warns US lacks stockpiles of masks

  • Italy Hotel in Lockdown ...



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Phil's Favorites

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



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Biotech & Health

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



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Kimble Charting Solutions

Dow Industrials Reversal Lower Could Be Double Whammy for Stock Bulls!

Courtesy of Chris Kimble

Dow Jones Industrial Average “monthly” Chart

The Dow Industrials have spent the past 70 years in a wide rising price channel marked by each (1). And the past 25 years have seen prices test and pull back from the upper end of that channel.

The current bull market cycle has seen stocks rise sharply off the 2009 lows toward the upper end of that channel once more.

In fact, the Dow has been hovering near the topside of that price channel for several months.

But just as the Dow is kissing the top of this channel, it might be creating back-to-back “monthly” bearish ...



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Insider Scoop

Benzinga's Top Upgrades, Downgrades For February 25, 2020

Courtesy of Benzinga

Upgrades
  • Sidoti & Co. changed the rating for FormFactor Inc (NASDAQ: FORM) from Neutral to Buy. For the fourth quarter, FormFactor had an EPS of $0.41, compared to year-ago quarter EPS of $0.31. The stock has a 52-week-high of $28.58 and a 52-week-low of $14.20. FormFactor's stock last closed at $23.16 per share.
Downgrades
  • Dougherty downgraded the stock for Palo Alto Networks Inc (NYSE: PANW) from Buy to Neutral. Palo Alto Networks earned $1.19 in the second quarter. The stock has a...


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The Technical Traders

Yield Curve Patterns - What To Expect In 2020

Courtesy of Technical Traders

Quite a bit of information can be gleaned from the US Treasury Yield Curve charts.  There are two very interesting components that we identified from the Yield Curve charts below.  First, the bottom in late 2018 was a very important price bottom in the US markets.  That low presented a very deep bottom in the Yield Curve 30Y-10Y chart.  We believe this bottom set up a very dynamic shift in the capital markets that present the current risk factor throughout must of the rest of the world.  Second, this same December 2018 price bottom set up a very unique consolidation pattern on the 10Y-3Y Yield Curve chart.  This pattern has been seen before, in late 1997-1998 and late 2005-2008.

...

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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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