Posts Tagged ‘VRTX’

Vertex Call Spread Eyes Big Gains In Drug Maker’s Shares

 

Today’s tickers: VRTX, ZQK & JPM

VRTX - Vertex Pharmaceuticals, Inc. – A sizable bullish position initiated in Vertex options this morning looks for shares in the drug maker to regain some of the steep losses realized during the past two months. Shares in Vertex Pharmaceuticals are trading flat on the session at $39.10 as of 11:20 a.m. ET, but have dropped 35% since the second week in October. One options trader who appears to have purchased a 3,500-lot April $42/$55 call spread for a net premium of $2.66 per contract stands ready to profit from a strong rebound in Vertex shares through expiration. The spread starts making money if shares increase 14% over the current price of $39.10 to surpass the effective breakeven point at $44.66, with maximum potential profits of $10.34 per contract available in the event shares jump 41% to hit $55.00 by expiration in April.

ZQK - Quiksilver, Inc. – Options on apparel and accessories retailer, Quiksilver, Inc., are more active than usual on Friday ahead of the company’s fourth-quarter earnings report next week. Shares in the maker of casual wear under its Quiksilver, Roxy and DC brands are trading up 2% today at $4.09 as of midday on the East Coast. Traders exchanged more than 7,500 option contracts on ZQK during the first half of the session, sizable volume versus the stock’s average daily options volume of around 1,300 contracts. The Dec. $5.0 strike calls are seeing the heaviest trading traffic, with more than 4,200 lots in play against zero open positions. It looks like most of these calls were purchased for an average premium of $0.05 apiece, perhaps by one or more strategists expecting the price of the underlying to pop after earnings. The stock posted double-digit percentage gains following the release of third-quarter earnings in September and after the second-quarter earnings report in April of this year. Buyers of the $5.0 strike front month call options on ZQK this morning may profit at expiration should shares in the name rally nearly 25% to top the breakeven price of $5.05.…
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Traders Dialed In To Research In Motion Calls As Shares Extend Gains

 

Today’s tickers: RIMM, VRTX & ABX

RIMM - Research In Motion Ltd. – Upside call buying in Blackberry maker, Research In Motion, could result in quick overnight profits for some traders as long as shares in the name extend gains through the end of the trading week. Shares in RIMM are up 9% this morning to stand at $8.65 as of 11:55 a.m. in New York, adding to Wednesday’s more than 4.5% gain in the stock, sparked by reports that wireless carriers have started lab-testing the company’s Blackberry 10 phones. Options traders who purchased weekly calls on Research In Motion yesterday have in some cases seen the value of bullish positions rise markedly since the prior session. For example, buyers of around 1,600 Nov. 02 ’12 $8.5 strike calls on Wednesday for roughly $0.01 per contract now find these options changing hands at $0.18 apiece. Traders appear to be bulking up on the $8.5 strike weekly calls, purchasing another 2,300 contracts in morning trading on Thursday. Bulls also snapped up 2,300 calls at the higher Nov. 02 ’12 $9.0 strike for an average premium of $0.02 each. Continued gains in shares of the wireless company ahead of the weekend may result in substantial gains on positions established today. Not all trading traffic in weekly options with one full trading session remaining to expiration is bullish. Buyers of around 2,400 puts at the Nov. 02 ’12 $8.5 strike for an average premium of $0.13 apiece, and some 4,000 of the Nov. 02 ’12 $8.0 strike put options at $0.05 each, may profit at expiration if RIMM’s shares return some of the week’s gains tomorrow.

VRTX - Vertex Pharmaceuticals, Inc. – Shares in drug maker, Vertex Pharmaceuticals, Inc., are soaring today, up better than 7% at $51.72 in early-afternoon trade, on news the biotechnology company agreed to test one of its experimental hepatitis C drugs with therapies from Johnson & Johnson and GlaxoSmithKline. Cambridge, Mass.-based Vertex is…
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Bank of America Bull Sets Up Shop in August Contract Calls and Puts

Today’s tickers: BAC, VRTX, SKX & GT

BAC - Bank of America Corp. – Pessimism on the financial sector overflow-eth as of late and shares in Bank of America currently hover just above fresh 2-year lows, but for one contrarian strategist it looks like now is the perfect time to bet big on a BAC-rebound. Shares in Bank of America lost 31.4% of their value since mid-January, sliding to as low as $10.50 before rising 1.50% this afternoon to $10.70. Hoping to see shares in the financial services company recover by the dog days of summer, it appears one big player employed a three-legged bullish spread using August contract call and put options. The investor picked up 25,000 calls at the August $11 strike for a premium of $0.46 each, sold the same number of calls up at the August $14 strike at a premium of $0.02 per contract, and sold 25,000 puts at the August $9.0 strike for a premium of $0.14 a-pop. The net cost of the transaction reduces to $0.30 per contract and prepares the trader to profit should BAC’s shares rally 5.6% over the current price of $10.70 to breach the effective breakeven point at $11.30 by August expiration day. The trader paid $0.30 per contract – or a total of $750,000 – for the spread, but stands ready to make as much as $2.70 per contract or $6.75 million if the price of the underlying soars 30.8% in the next couple of months to exceed $14.00 at expiration. The parameters of the transaction are such that the investor could lose more than just the three-quarters of a million dollars paid for the transaction. Short puts at the August $9.0 strike indicate the trader could have 2.5 million shares of the underlying put to him at $9.00 at expiration should the stock continue to deteriorate. But, the investor seems more than happy to bear such risk in exchange for the added financing provided by the third-leg of the spread.…
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Apple Shares Reach New 52-Week High Ahead of iPad Release

Today’s tickers: AAPL, GDXJ, CEPH, LO, MHK, VRTX & MJN

AAPL – Apple, Inc. – Shares of the iPhone and iPod maker rallied to a new 52-week high of 233.87 in morning trading with just five days remaining before the firm’s newest product, the iPad, hits retail stores across the U.S. Bullish options trading patterns on the stock today indicate optimistic sentiment on Apple ahead of the iPad’s release on Saturday morning. One investor enacted a bullish put credit spread in the May contract in order to benefit from continued strength in the price of Apple’s shares through expiration. It looks like approximately 10,000 puts were shed at the May $210 strike for an average premium of $3.46 per contract, marked against the purchase of about the same number of puts at the lower May $200 strike for $1.95 each. The investor responsible for the spread pockets a net credit of $1.51 per contract, which he keeps in full as long as Apple’s shares trade above $210.00 through May expiration. Maximum potential losses faced by the trader amount to $8.49 per contract should shares of the underlying stock plummet 14.5% to $200.00 ahead of expiration day in May.

GDXJ – Market Vectors Junior Gold Miners ETF – The GDXJ, which is an exchange-traded fund that seeks to replicate the price and yield performance of the Market Vectors Junior Gold Miners Index, realized a 1.25% appreciation in the value of its underlying share price to $25.82 today. The Market Vectors Junior Gold Miners Index tracks the overall performance of foreign and domestic publicly traded companies of small/medium-capitalization that primarily engage in gold and/or silver mining. Despite the move higher in shares today, one options trader initiated a bearish debit put spread in the May contract. It appears the investor purchased 10,000 in-the-money puts at the May $26 strike for a premium of $1.65 apiece and sold the same number of puts at the lower May $23 strike for $0.52 each. The net cost of the put spread amounts to $1.13 per contract. If the investor responsible for the trade holds no underlying share position, maximum potential profits of $1.87 per contract are available if shares slip to $23.00 by expiration day in May. However, the trader may be buying the spread to protect the value of an existing underlying share position, in which case protection kicks in beneath the breakeven share…
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Gloomy Put Options Posturing on Financials ETF

Today’s tickers: XLF, ETFC, CF, HGSI, EEM, BEBE, SMH, VRTX, HGSI, F & LDK

XLF – Financial Select Sector SPDR – A large bearish spread in the June 2010 contract suggests one investor feels the need for downside protection through expiration. Shares are slightly up this afternoon by about 0.25% to $14.09. The trader purchased 20,000 put options at the June 14 strike for an average premium of 1.91 apiece. He financed the long position by selling 20,000 puts at the June 11 strike for 74 cents each, and by selling another 20,000 puts at the lower June 10 strike for 51 cents premium. The net cost of the transaction amounts to 66 cents per contract. The investor responsible for the three-legged spread is possibly holding a long stock position in the XLF. The put options might then serve to protect the value of the position in the event that shares decline beneath the effective breakeven point at $13.34 by expiration. The fact that the trader is short two times as many puts indicates this investor expects a pullback but not a collapse beneath the lower strike price of $10.00.

ETFC – E*Trade Financial Corp. – The Wall Street Journal reported that ETFC withdrew its application for funding through the Troubled Asset Relief Program (TARP) because the company’s “recent capital-raising and debt-reduction efforts negates the need for the money.” E*Trade raised $150 million by selling stock in the third quarter out of some $765 million of sold stock this year. The seemingly bullish news that the company no longer plans to participate in the capital-purchase program did not do much for the current share price, which slipped 6% lower to $1.37. Our scanners picked up on interesting options activity this afternoon that may or may not have been inspired by today’s news. It appears 95,000 put options sold at the January 1.0 strike for about 5.5 pennies apiece. One may infer the transaction represents bullish sentiment on ETFC if the sale of the put options is fresh activity. If this is the case, the trader pockets the 5.5 cents premium, and expects shares to remain above $1.00 through expiration. However, the sale could also be the work of an investor closing out a long put position given the already high reading of open interest at the small number of available strike prices.

CF – CF Industries Holdings, Inc. – The…
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Pre-tense

Today’s tickers: PALM, AA, UNG, FXI, IYR, YGE, VRTX & XLF

PALM– Shares are up more than 9% to $13.67 just two days prior to the much anticipated release of Palm’s touch-screen handset, The Pre. While some reviews of the new product suggest The Pre is attractive and innovative, others have indicated that it cannot hold a candle to Apple’s iPhone. The real test will begin in two days when the phone goes on sale to the public, exclusively through U.S. carrier, Sprint Nextel Corp. (S). A number of option traders are hoping The Pre will wow consumers and subsequently boost Palm’s shares as they were seen getting long of bullish calls in the near-term June contract. More than 4,300 calls were snapped up at the June 16 strike price for a premium of 29 cents apiece. Other Pre-optimists paid just a dime per contract to pick up 2,000 calls at the higher June 20 strike price. If Palm’s new product pleases the masses, investors long of June 20 calls may realize profits if shares can climb 47% to the breakeven point at $20.10 by expiration. – Palm, Inc.

AA– The world leader in the production of primary aluminum has experienced a significant share price rally of more than 7.5% to $10.83 after the firm announced that it sees “great opportunity” for growth in Russia. Alcoa has invested some $750 million over the past five years. A large-volume call spread initiated in the October contract suggests at least one investor is hoping for continued bullish movement in the stock over the next several months. The transaction involved the purchase of 12,600 calls at the October 12.5 strike price for a premium of 1.02 apiece spread against the sale of 12,600 calls at the higher October 17.5 strike for about 23 cents. The net cost of the optimistic play amounts to 79 cents and yields maximum potential profits of 4.21 if shares rally up to $17.50 by expiration. The stock must climb approximately 23% before the investor begins to amass profits at the breakeven point of $13.29. – Alcoa, Inc.

UNG– Recovering from losses experienced earlier in the trading day, the natural gas ETF has rallied slightly by about 0.5% to $14.37. We observed an interesting play initiated by one trader once we skipped over all of the nearer-term activity on the fund to arrive at the January 2010 contract. The
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Option trader predicts natural gas set to rally into next heating season

Today’s tickers: UNG, HIG, XLF, XRT, CLF, WFMI & VRTX

UNG– Shares of the natural gas fund have rallied by more than 1% to stand at $16.66. We observed some bullish call buying on the ETF by one investor looking for natural gas prices to heat up as we head into the beginning of ‘heating season’ in October. It appears that this individual looked to the October 20 strike price and purchased 26,000 calls for an average premium of 1.45 apiece. The 31,000 call options traded at the October 20 strike today is more than five times the existing open interest at the strike of just 6,834 lots. With a breakeven point of $21.45 on the trade, the investor is hoping to see shares of UNG rally by a minimum of 29% from the current price so he may begin to garner profits to the upside. – United States Natural Gas ETF

HIG– Investors in the insurance and financial services firm have witnessed HIG’s shares surge more than 21% today to the current price of $15.23. While a mass of more than 120,000 option contracts exchanged hands on the stock throughout the trading day, our attention was drawn to a couple of bullish plays. Traders who expect the stock to retain gains into next month looked to the June 16 strike price and purchased some 4,000 calls for an average premium of 1.20 each. Investors will breakeven at a price of $17.20 by expiration. Uber-bullishness was observed at the September 25 strike where about 4,400 calls appear to have been purchased for a premium of 91 cents per contract. These call-buyers have thrown a Hail Mary pass today, but they will have to wait to see whether it will be received in the end zone or whether it will fall short by expiration. To profit from the long-call position, shares will need to rally with a vengeance by about 70% through the breakeven point at $25.91. Option implied volatility has climbed throughout the week from 112% on Monday to the current reading of 144%. – Hartford Financial Services Group, Inc.

XLF– The financials ETF, a daily presence on our ‘most active by options volume’ market scanner, has enjoyed a more than 3.5% rally to $11.80 amid broad gains enjoyed by financial firms today. While more than 250,000 option contracts were traded on the fund, we focused in on one…
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Microsoft options looking bullish

Today’s tickers: MSFT, XLF, VRTX, X, MT, TIF, JCG & AIG

MSFT Microsoft Corporation – Some option traders laughed in the face of a 2% decline in MSFT’s shares and were seen making some bullish plays on the stock which currently stands at $19.16. One trade of note was the sale of 5,000 puts at the July 17 strike price for a premium of 90 cents apiece spread against the purchase of 5,000 calls at the July 22 strike price for 74 cents each. This optimistic investor accepts a 16 cent credit on the trade and appears to be looking for shares to rally by about 19% through the breakeven point at $22.74 by expiration. Other bullish investors selected the July 23 strike price where more than 11,000 calls were purchased for an average premium of 44 cents per contract.

XLF Financial Select Sector SPDR – Shares of the XLF have plunged more than 5% to $10.50 today. However, we observed one options investor looking for a recovery in financials by September’s expiry. The financials ETF was one of the top tickers on our ‘most active by options volume’ market scanner with more than 406,000 contracts traded throughout the day. The trade we chose to highlight involved the purchase of 20,000 puts at the September 8.0 strike price for 80 cents apiece spread against the sale of 10,000 puts sold for a premium of 2.79 per contract. This ratio spread yields a credit of 1.19 to the trader (2.79*1 – 0.80*2 = 1.19). The investor will retain the full credit if shares rise through $12.00 by expiration in September. The purchase of twice as many puts at the lower 8.0 strike price serves to cap the investor’s losses at a maximum of 2.81 should shares continue to fall all the way to $8.00 by expiration.

VRTX Vertex Pharmaceuticals, Inc. – The pharmaceuticals company has seen its shares give back gains experienced earlier in the trading day, and is currently off by less than 1% to stand at $27.10. Option implied volatility has jumped from 72% yesterday to the current value of 82% amid unconfirmed rumors reported by one source that Johnson & Johnson may be eyeing VRTX. Option traders took bullish stances on the company by purchasing calls in the April and May contracts. The in-the-money April 25 strike price had 1,100 calls bought for 3.27 apiece, while the April…
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Phil's Favorites

The Year 2020 - The Pandemic and Speculation

 

The Year 2020 – The Pandemic and Speculation

Courtesy of Howard Lindzon

It’s December and I can’t really tell if this year moved really fast or really slow.

Time seemed to stand still in March as we all locked down.

But here we are in December and the stock market is acting like we are secretly running around and spending like never before.

The year 2020 will forever be remembered for the pandemic, but I will also forever remember it for speculation.

There are all kinds of reasons for the historic speculation.

We were locked in our homes…we had Robinhood and fractional share ownership and apps that let us chat 24/7 about stock...



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Biotech/COVID-19

New DIY contact tracing app expands the fight against COVID-19, using the science of memory

 

New DIY contact tracing app expands the fight against COVID-19, using the science of memory

This app is different. Designed by psychologists, the free and anonymous web-based app can help you remember who you came in contact with. Ani Ka via Getty Images

Courtesy of Jacqueline R. Evans, Florida International University; Christian Meissner, Iowa State University; ...



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ValueWalk

Stephanie Kelton: Stop Worrying About National Deficits

By Jacob Wolinsky. Originally published at ValueWalk.

Tomorrow evening, Bernie Sanders’ economic advisor Stephanie Kelton, a leading voice behind the push to spend more on progressive priorities, is appearing in the Intelligence Squared U.S. debate on the motion “Stop Worrying About National Deficits.”

Q3 2020 hedge fund letters, conferences and more

Economic Advisor Stephanie Kelton Debates About The About National Deficits

She's arguing for the motion alongside James Galbraith, who was Executive Director of the Joint Economic Committee in Congress. Arguing against them are Todd Buchhol...



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Zero Hedge

Restaurants Slashed Jobs Last Month

Courtesy of ZeroHedge

By Jonathan Maze of Restaurant Business

The restaurant industry lost 17,400 jobs in November, according to new data from the U.S. Department of Labor released on Friday.

It was the first monthly decline in the number of restaurant workers since April, suggesting that a renewed virus and state shutdowns of dine-in service are taking their toll.

The data is likely to increase pressure on Congress and the president to approve a new stimulus package, one that includes specific aid to independent restaurants that have been devastated by the pandemic.

The industry had been adding jobs at a rapid clip since May, as restaurants reopened dining rooms and expanded while consumers grew more comfortable with dining out. But it remains far below its pre-pande...



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Kimble Charting Solutions

Is The US Dollar About To Reach A Melting Point?

Courtesy of Chris Kimble

It’s been 20 years since the last major peak in the US Dollar. Could the greenback’s latest turn lower confirm another peak?

Today’s chart takes a macro view of the US Dollar Index and highlights the long-term down-trend at each point (1). As you can see, the buck is on a topsy turvy ride, bouncing up and down within this down-trend.

The latest bottom formed after the financial crisis and has seen the US Dollar trade within a 9 year up-trend channel marked by each (2). This gave bulls some confidence that the US Dollar may have formed a long-term bottomȂ...



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Politics

Ignoring Warnings His Election Lies Could Get People Killed, Trump Posts 46-Minute Rant Full of 'Unhinged' Falsehoods

 

Ignoring Warnings His Election Lies Could Get People Killed, Trump Posts 46-Minute Rant Full of 'Unhinged' Falsehoods

"Georgia elections director yesterday: Trump's rhetoric is going to get people killed. Trump today: here's 46 minutes of unhinged conspiracy theories."

Courtesy of Jake Johnson, Common Dreams

Activists march through the city of Detroit on November 7, 2020 to denounce President Donald Trump's false claims of voter fraud. (Photo: Adam J. Dewey/NurPhoto via Getty Images)

Just days...



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Chart School

Gold Chart Review

Courtesy of Read the Ticker

Gold swing trade is due, lets review some charts to see if it is a viable move.

The seasonal period of gold is now upon us, gold should advance for the next 3 months.

Gold Gann Angle Chart ...



Gold Channel Chart .. close up!



 

Gold Channel Chart
 


Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Ang...



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Digital Currencies

Five Reasons Why Bitcoin is Going Up

 

Five Reasons Why Bitcoin is Going Up

Courtesy of 

Call it the “Respectability Rally”…

A few reasons for Bitcoin’s return to the record highs. It’s about $18,500 as of this writing, matching the previous highs from 2017’s original explosion.

Reason one: It’s going up because it’s going up. Don’t scoff, this is the reason most things in the markets happen and then the explanations are called for afterwards. I’m in financial television, I have literally watched this process occur in real-time. The more something moves in a given direction, the more peop...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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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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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.