Posts Tagged ‘WMB’

Bullish Speculator Hits the Mark with Cheniere Energy Strategy

Today’s tickers: LNG, WMB, KKD & LVS

LNG - Cheniere Energy, Inc. – How much would you be willing to pay for call options with five months to expiration to gain the right to buy a $7.74 stock for $12.00 a share? In the case of Cheniere Energy, one bullish strategist was willing to pay an average of $0.82 per contract, a total price tag of approximately $1.64 million, for some 20,000 September $12 strike calls back on April 14. Shares in LNG at that time had fallen 23.0% since the previous week to trade around $7.74 on the date the calls were purchased. The sizable bullish play on LNG last month left us to consider what the impetus behind such a trade might be, as well as what might be expected to drive shares up 55.0% in the five months to expiration. On Friday shares in the liquefied natural gas (LNG) provider surged 44.5% to $11.11 on news the company received government approval to export fuel to more countries. Cheniere’s shares rallied as much as 15.3% over Friday’s high of $11.11 to touch today’s intraday- and new 52-week high of $12.81 on news of the approval. Whether the call buyer was speculating on a post-export approval rally or not is unknown and perhaps rather unimportant at this point. The decision to buy the calls outright for an average premium of $0.82 per contract has, for the time being, proven well worth the initial cost. September $12 strike calls on Cheniere Energy cost as much as $2.85 per contract this morning, that’s roughly 3.5 times as much as the investor paid for the options back in April. The initial play saw the speculator layout $1.64 million, which today was worth as much as $5.7 million. Open interest of 21,483 calls at the September $12 strike suggests the investor is not surprised by the jump in value and as such shows no signs of closing the position just yet. At expiration, the trader profits…
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Options Feeding Frenzy Gains Momentum as Shares in Ford Motor Co. Hit 8-Year High

Today’s tickers: F, ALU, WMB, TLCR, PG & LNG

F - Ford Motor Co. – The automaker’s shares jumped 6.80% during the session to an intraday high of $17.41, the highest recorded share price for Ford Motor Co. since June 3, 2002. Options on Ford are extremely well trafficked today with shares surging to new heights and the market eagerly awaiting rival General Motors Company’s public stock offering. More than 2.2 call options are changing hands on the stock for each single put in play out of the more than 704,650 contracts exchanged on the automobile maker as of 3:45 pm in New York. Nearer-term call options are the most active, with volume in November $17 strike calls exceeding 70,800 lots ahead of the closing, bell versus previously existing open interest of 45,757 contracts at that strike. The majority of those in-the-money call options were purchased for an average premium of $0.46 apiece. Call buyers at this strike make money if Ford’s shares exceed $17.46 ahead of expiration on Friday. Buying interest spread all the way up to the sky-high November $20 and $21 strikes. More than 5,000 of the November $20 strike calls were picked up for an average premium of $0.03 a-pop. The premium on these contracts will continue to rise as long as Ford’s shares head higher in the next 4 trading sessions, and may provide call buyers the opportunity to bank handsome profits ahead of expiration day. The December $20 strike calls were even more popular, with some 17,000 lots purchased at an average premium of $0.15 each. Bullish players were also seen selling in- and out-of-the-money put options across multiple expiries. Near-term November $16 strike puts were the most heavily populated as upwards of 53,250 contracts changed hands by 3:50 pm. Strong demand for the automaker’s option contracts, GM’s impending IPO and the sharp shift in Ford’s share price today helped lift the overall reading of options implied volatility on the stock 9.4% to 45.92% late in the…
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Motorola-Bull Cleans Up

Today’s tickers: MOT, RIMM, WMB, CAG, PFCB & SAI

MOT – Motorola, Inc. – Shares of the maker of the Droid smartphone fell in morning trading but recovered during the session to add as much as 3 pennies or 0.35% to arrive at an intraday-high of $8.39 this afternoon. Motorola appeared on our ‘most active by options volume’ market scanner today after one options player appears to have booked profits on a previously established bullish position. It looks like the investor originally purchased roughly 28,000 calls at the September $7.0 strike for an average premium of $0.70 each back on August 19, 2010, when MOT shares were trading at a volume-weighted average price of $7.55. The appreciation in the price of the underling since the calls were purchased lifted premium on the September $7.0 strike calls, allowing the trader to sell the contracts for $1.35 in premium apiece today. Net profits on the transaction amount to $0.65 per contract. Next, it looks like the bullish player re-opened, or rolled, the position to the higher October $8.0 strike where approximately 28,000 calls were picked up at an average premium of $0.10 a-pop. The investor starts to make money on the fresh batch of calls if Motorola’s shares surge 8.5% over the current price of $8.39 to surpass the effective breakeven price of $9.10 by expiration. We note that the investor may walk away with profits on the new long call position before October expiration if circumstances going forward lift the premium on those calls and the trader opts to sell the position at an advantageous price.

RIMM – Research in Motion Ltd. – Options on the Blackberry maker are a hot ticket item today ahead of the firm’s second-quarter earnings report scheduled for release after the closing bell this afternoon. Frenzied trading ensued right out of the gate this morning with investors heavily trafficking in September and October contract call and put options. Shares are currently up 1.1% at $46.02 as of 1:45 pm ET, but earlier rallied as much as 2.3% to reign in an intraday high of $46.58. The overall reading of options implied volatility on the stock increased 5.1% in the first half of the session to top out at 58.22%, but has come off to stand just 2.6% higher on the day at 56.82%. Although more than 1.7 call options changed hands for each single put on…
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Fannie Mae Put Action Explodes in Afternoon Trading

Today’s tickers: FNM, EWZ, IYR, GILD, FXI, WLP, EEM, ARG, DWA & WMB

FNM – Fannie Mae – Mortgage-financer, familiarly known as Fannie Mae, jumped onto our ‘most active by options volume’ market scanner after one investor went hog-wild with put options. Fannie’s shares slipped 3% during the trading day to $0.95 apiece. The investor appears to have traded 118,000 in-the-money put options at the March $1.0 strike for a premium of $0.15 apiece, spread against the sale of 118,000 puts at the January 2012 $1.0 strike for a premium of $0.40 each. Open interest of 156,689 puts at the March $1.0 strike indicate the trader could be buying-to-close a previously established 118,000-lot short put position initiated back in September of 2009. If this is the case, the investor is extending the short put position out to the January 2012 contract and expecting the government agency to ultimately survive the next couple of years. In this scenario, the trader keeps the $0.40 in premium on the sale of the fresh batch of put options if Fannie’s share price rallies above $1.00 by expiration in 2012. But, there are a other possible explanations for the trade. It is possible that the open interest at the March $1.0 strike is unrelated to today’s activity. In this second scenario, the trader is essentially predicting that shares will erode ahead of March expiration. If this is the case the trader sold 118,000 January 2012 $1.0 strike puts for $0.40 apiece in order to take a long 118,000-lot put stance at the March $1.0 strike for which he paid $0.15 each. The net credit received in this scenario amounts to $0.25 per contract and generates additional profits as Fannie’s shares continue to fall under $1.00. It will be interesting to see whether the open interest level at the March $1.0 strike changes to reflect the closing of a previously established long or short put position. Regardless of the direction of- or motivation behind- the transaction the large volume of the trading activity is certainly noteworthy.

EWZ – iShares MSCI Brazil Index ETF – A ratio put spread enacted on the Brazil ETF suggests we may continue to see bearish movement in the price of the underlying stock through expiration in June. Shares of the fund are down 3% to $61.80 as of 2:20 pm (EDT). The investor responsible for the transaction purchased 7,500 puts at…
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Smithfield bulls like hogs

Today’s tickers: SFD, LTD, XLF, HNT, AIG, KEY, WMB & CSX

SFD Smithfield Foods, Inc. – Shares of the hog producer, pork processor, and beef processor have surged upwards by 6% to $10.50. Analysts in recent weeks used high feed prices and sluggish sales as reason enough to slash targets on food-producing companies, while there had also been concern on Smithfield’s ability to meet some forthcoming debt covenants. Corn prices have eased from $4.18 to $3.82 per bushel since the start of the month. Pork sales are also sensitive to the economy’s fortunes and sales have eased as consumers switch to cheaper grain-based foodstuffs and so perhaps today’s rally is based on expectations of a return to traditional consumption habits. Option investors crowded into the call-corral hoping that shares would continue to rise through expiration in June. The May 12.5 strike price had more than 7,200 calls purchased for 34 cents per contract while the June 12.5 strike witnessed some 2,300 calls coveted for 89 cents apiece. In order for these calls to land in-the-money, shares would need to continue to climb by another 19% from the current price. Option implied volatility has spiked to 102% from the value recorded at the start of the traded day of 77%.

LTD Limited Brands, Inc. – The specialty retailer of such brands as Victoria’s Secret and Henri Bendel has experienced a share price rally of 2% to stand at $10.88. LTD edged onto our ‘hot by options volume’ market scanner after one investor picked up a hefty chunk of puts in the August contract. Perhaps this bearish investor expects retailers to struggle through the summer months as consumers exchange their rally-caps for thrift-caps. This trader purchased 17,800 puts at the August 10 strike price for a premium of 1.25 per put option. It is possible that this trader is long the stock and is therefore utilizing the put options as downside protection should shares relapse over the next six months. The puts would begin to yield profits if shares were to decline by expiration, beginning at the breakeven share price of $8.75.

XLF Financial Select Sector SPDR – Shares of the financials ETF are slightly higher today by about 0.5% to $10.65. As usual, the fund was one of the top tickers on our ‘most active by options volume’ market scanner. One interesting trade we observed took place in the September…
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Phil's Favorites

Here's How the Fake Unemployment Number Was Created to Subdue Anger Against Wall Street

Courtesy of Pam Martens

Former Fed Chair Ben Bernanke

On February 3, 2015, Jim Clifton, the Chairman and CEO of the iconic 85-year old polling company, Gallup, penned an article for his company in which he called the reported unemployment number issued by the U.S. Government “The Big Lie.”

Wall Street On Parade has now discovered that a speech by former Fed Chairman Ben Bernanke and a statement made by the current Fed Chairman Jerome (Jay) Powell,  support the view that today’s repor...



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Zero Hedge

China Growth Slows To 29 Year Low In 2019 Despite Q4 Rebound

Courtesy of ZeroHedge View original post here.

With phase-one talks completed in October (and signed this week), tonight's Q4 GDP and December smorgasbord of data is being keenly watched by the market for any signs that China's massive credit stimulus has actually done any good at all.

Ahead of tonight's key China data dump, State Grid, China's largest utility company, has warned the rate of economic growth in the country could plunge to 4% within the next four years, according to internal forecasts.

"We were upbeat about China...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Citigroup lifted Caterpillar Inc. (NYSE: CAT) price target from $145 to $170. Caterpillar closed at $147.87 on Thursday.
  • UBS cut Twitter Inc (NYSE: TWTR) price target from $37 to $35. Twitter shares closed at $34.19 on Thursday.
  • Morgan Stanley boosted the price target for Yum! Brands, Inc. (NYSE: YUM) from $113 to $118. Yum! Brands closed at $102.16 on Thursday.
  • Jefferies lifted the price target on Ventas, Inc. (NYSE: ...


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Kimble Charting Solutions

Tesla About To Run Out Of Energy Here? Short-Term Peak Possible?

Courtesy of Chris Kimble

Tesla (TSLA) has been screaming higher of late, as very impressive gains have taken place.

Is Tesla about to run out of energy/take a break/experience some selling pressure? A unique price setup is in play, that bulls might want want to be aware of.

This chart applies Fibonacci to the 2016 lows and 2017 highs at each (1). The impressive rally of late has it testing its 161% extension level, based upon those price points.

At the same time, it is hitting its 161% extension level, it finds itself at the top of a 7-year rising channel, with momentum hitting the highest ...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The new year of 2020 has gold is poised to break out higher. Why is gold going higher? Maybe the FED's economists can explain .... or not.

Maybe these could be on the list:

- FED repo hundreds of billions a day.
- ECB made up tools to keep the European banks solvent.
- A sugar high stock market with Apple Inc and Microsoft looking like Bitcoin 2017.
- The US bond market is NOT confirming a strong stock market.
- Corporate profits have flat lined for 3 years while stocks soared each year.
- Knowing an US election year needs stimulus, and a lower US dollar is a first choice.
- China deal, will have a currency element to make it easier to do business. Lower US dollar.



Gold Gann Angle ...

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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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The Technical Traders

Is The Energy Sector Setting Up Another Great Entry?

Courtesy of Technical Traders

Another wild week for oil traders with missiles flying and huge overnight price swings in crude. As we recently pointed out within our current Oil research article, Oil and the Energy sector may be setting up for another great trade.  We recently commented on how the supply/demand situation for oil has changed over the past 20+ years. 

With US oil production near highs and a sh...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? How did it gain so much influence? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, ...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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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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