Whole Foods Options Active As Shares Spike
by Option Review - August 27th, 2014 3:12 pm
Shares in Whole Foods Market Inc. (Ticker: WFM) are on the move today, up 3.5% at $39.83 in the final hour of trading. The move in the price of the underlying sparked heavy trading in options on the high-end grocer, with volume topping 54,000 contracts versus average daily volume of around 17,000 contracts for the name. Most of the activity is in WFM calls, driving the call/put ratio to 5.0 at 3:00 p.m. ET.
Volume is concentrated in weekly calls set to expire ahead of the Labor Day holiday weekend. The most traded contracts are the Aug 29 ’14 40.0 strike calls as some strategists appear to be positioning for the shares to push above the threshold by expiration. Premium on the 40.0 weekly calls has exploded as shares hover just below the $40.00 level, with premium rising from just $0.03 on Tuesday up to as high as $0.33 per contract this afternoon. The Sep 19 ’14 call options are also seeing heavy trading traffic, as are the Oct 17 ’14 call options at the 40.0, 42.0, 43.0 and 44.0 striking prices. As of the time of this writing, shares in Whole Foods have just burst through $40.00 and have jumped to $40.21, the highest level since August 5th.
Chart – Two-day chart of Whole Foods
Options Pop On Whole Foods
by Option Review - August 5th, 2014 1:44 pm
Shares in beleaguered organic and high-end grocer Whole Foods (Ticker: WFM) jumped as much as 6.4% in the first hour of trading to $40.39 to the highest since June 20th. The spike in the price of WFM shares and unconfirmed chatter on Twitter and theflyonthewall.com spurred heavy trading in weekly options on the stock. The most traded contracts are the 08Aug’14 39.0 strike calls, which have traded more than 5,300 times against open interest of roughly 1,300 contracts. Time and sales suggests the bulk of the volume is the work of buyers paying an average premium of $0.48 apiece. First movers paid around $0.20 per contract for around 1,400 of those contracts. Also active are the 08Aug’14 39.5 and 40.0 strike calls, with upwards of 2,300 calls traded at each striking price.
Chart – Whole Foods shares rise; volume in shares, options spike
Toppy Tuesday – S&P 1,950 Edition
by phil - June 10th, 2014 8:34 am
Here we go again!
As you can see from Dave Fry's S&P chart, we're back in the top of the channel on a Tuesday and I will refer you to April 1st's "Triple Top Tuesday" and December 31st's "Terminal Tuesday" – both of which were points we thought the market was topping out before.
Actually, in both cases, we did have a mild pullback, but nothing that broke the trend – so far.
Back in that December post, we were playing gold (/YG) bullish at $1,185 to finish the year, based on our premise of MORE FREE MONEY in 2014 keeping the markets afloat. We also went bullish on SHLD at $40, which is like $30 post-spit.
In the April post, it was our 3rd try at 1,880 on the S&P and we had just cashed out our Income Portfolio and I we lost $10 betting the Nasdaq would be above 4,200 at April expirations on a TQQQ spread (now 4,350 – so bad timing) but our support held and kept the damage to a minimum. We also (in the morning post) called for selling the AAPL Jan $450 puts for $5.90 to pay for those spreads and AAPL just split 7:1 so those are now the $64.29 puts at .25. 7 x .25 = $1.75 so up $4.15 (70%) already on that play.
We also had bullish trade ideas for HOV, CHL, FCX, ABX and RIG – right in the morning post! Our best play, however, was shorting the Russell Futures (/TF) at 1,180 in Member Chat at 10:53 – as that was the beginning of an $9,000 per contract pullback on that index – all the way back to 1,090 (where we went long).
As you can see from Dave's Russell chart, we're just playing a channel with our trades – it's really not that complicated. Yesterday the Russell hit 1,180 and – guess what – we shorted it again! Now you are catching on to our "secret" strategy!
Already this morning the Russell Futures are down to 1,170, which is +$1,000 per contract from 1,180 but our…
The Buy List – 20 Great Trade Ideas for the Rest of 2014 (Members Only)
by phil - June 7th, 2014 8:24 am
What a rally!
While stocks certainly aren't "cheap" by any measure, we've been able to identify 20 that are still good values. We've been compiling this list and going over trade ideas for playing them in our Tuesday Webinars since May 13th and, of course, we've been posting them in our Live Member Chat rooms, so this is just a review to consolidate our trade ideas.
We cashed in our Long-Term Portfolio last week at what we thought was a top but so far – so wrong on that call! Since it's up 19% in just 6 months, we're not going to cry about missing the last 400-point move on the Dow (2.5%) – we'll just have to look ahead to deploying our cash again, following the same strategy that was so successful in the first half of the year, which was, essetially, our "7 Steps to Consistently Making 20-40% Annual Returns" system:
As we did in building our Long-Term Portfolio, we're not going to rush in and buy everything. We will do exactly what we did in January where, following our Fall Buy List, we simply added stocks from our list whenever they became cheap. While our Members are able to pick up our trade ideas as they are released, we don't always add them to our virtual portfolios right away. As with the first half's Long-Term Portfolio, we will track every entry and exit in both our Live Weekly Webcasts, as well as in our Live Member Chat Room and alerts will be sent to our subscribers (you can join here, Basic and Premium Members get full access).
Our picks were originally grouped by industry sectors but, for reference purposes, I'm going to list them alphabetically below – these are the original trade ideas (the Webinar dates where we discussed our picks are next to the symbol), most are still playable but some have already taken off :
ABX (5/28) we featured in our June 3rd post - obviously one I like. If you don't want to buy the stock for $15.90 (and we NEVER pay retail at PSW!), then you can sell the 2016 $15 puts for $2.05,…
Which Way Wednesday – Breaking Out or Breaking Down?
by phil - May 14th, 2014 8:50 am
Three out of five indexes look very good!
The same can be said about a dog with three legs and no tail, I suppose. So, the question is, is the market a dog in a nice sweater or whatever the metaphor would be for something where 3 healthy guys drag two dead guys around and win the race.
Hmmm, I guess there is no metaphor for that – BECAUSE IT'S RIDICULOUS, isn't it? A healthy market looks like a healthy market and this does NOT look like a healthy market.
You can ignore Russia invading Ukraine, you can ignore China's exploding debt bubble, you can ignore collapsing German Investor Confidence, you can ignore Japanese Inflation, you can ignore all the stuff we already talked about in this morning's news alert – but that's not going to make it go away!
Yes, we made new highs yesterday but look at the crap volume. The volume on the Friday after Thanksgiving (half a day) was 55M on SPY, the volume on Dec 26th was 63M and New Year's Eve was 86M – that's how ridiculous yesterday's volume was.
We're still in the pattern of the market rising on low volumes and selling off on high volume, which is simply the way the Banksters pump up their holdings into the opens and then dump them on what few retail suckers are participating into the closes.
You can hear their media puppets ramping up the rhetoric at the same time, wagging their fingers at the retail investors and telling them they are "missing" the rally. Why weren't they saying that when the markets were 50% cheaper? Why not when they were 25% cheaper? No, only at a market top does the Corporate Media tell you to BUYBUYBUY because their masters already bought their fill and now they need someone to hold the bag. Same as it ever was.
Check out the front page of Mr. Murdoch's Wall Street Journal, nothing about Russia and they spin the Administration's attempt to boost Housing as a positive when it's actually a reaction…
Appetite For Whole Foods Calls As Shares Rebound
by Option Review - February 14th, 2014 4:28 pm
Whole Foods Market Inc. (Ticker: WFM) shares are on the mend this morning, up more than 2.0% at $52.60 as of 11:00 a.m. EST, after yesterday losing more than 7.0% on the heels of a weaker than expected first-quarter earnings report released on Wednesday after the close.
Upside call buying in the regular March expiry options on WFM this morning looks for shares in the organic and natural foods grocer to continue to rebound during the next five weeks to expiration. The Mar $52.5 strike calls traded more than 6,000 times against open interest of roughly 2,000 contracts, with the bulk of the volume purchased at an average premium of $1.44 each. Traders long the calls stand ready to profit at expiration next month should shares in Whole Foods rise 2.5% over the current price of $52.60 to exceed the average breakeven point at $53.94. Shares in Whole Foods are down roughly 20% since trading up to an eight-year high of $65.59 back on October 28th.
Shares in weight management solutions provider Weight Watchers International, Inc. (Ticker: WTW) dropped 27% on Friday to a new four-year low of $22.35 after the company yesterday reported fourth-quarter earnings that missed analyst estimates and forecast earnings for fiscal 2014 below average analyst expectations.
The most traded options contracts by volume on Weight Watchers during the first 90 minutes of the session suggests some traders are positioning for the price of the underlying to continue lower in the near term. The Feb $20 strike puts are the most active on WTW as of the time of this writing, with upwards of 9,000 puts in play against open interest of 444 contracts. Time and sales data indicates most of the puts were purchased for an average premium of $0.40 each in the early going. Put buyers stand ready to profit at expiration next week in the event that shares in Weight Watchers decline another 14% from the current price of $22.91 to trade below the average breakeven point at $19.60. Shares in Weight Watchers last traded below $19.60 in April of 2009.