Posts Tagged ‘WYE’

Potash Attracts Option Plays as Shares Increase

Today’s tickers: POT, EWZ, USO, C, NTRI, GFI, AUY, AA, & WYE

POT - Shares of the Canadian producer of potash rallied more than 5% during the trading session to break through the $90.00-level. The stock tempered this afternoon, however, and stands just 2.5% higher for the day at $87.89. We observed interesting bullish plays take place in the December contract. One investor established a 2,000-lot buy-write strategy, also known as a covered call. The covered call involved the purchase of shares of the underlying stock for approximately $90.74, and the simultaneous sale of 2,000 call options at the December 110 strike for a premium of 1.80 per contract. The cost of buying the stock is reduced by the value of the premium received on the sale of the calls, resulting in an effective price per share of $88.94. Additionally, the short call position serves as an exit strategy for the trader if shares of POT trade above $110.00 by expiration. If the December 110 strike calls land in-the-money, the investor will likely have the underlying shares called from him, and he will be left with net profits of 24% on the rally in the stock. The other strategy employed by POT-lovers this afternoon was a call spread. Investors purchased 5,000 calls at the December 115 strike for 1.25 each, and sold 5,000 calls at the higher December 120 strike for 85 cents premium apiece. – Potash Corp. of Saskatchewan, Inc. –

EWZ - Shares of the Brazil exchange-traded fund are slightly higher this afternoon by less than 0.5% to stand at $69.58. Option traders expecting continued bullish movement in the price of the fund initiated optimistic plays across several contracts. One nearer-term indication of bullish sentiment is a call spread in the November contract. The trade likely involves the purchase of 2,000 calls at the November 71 strike for a premium of 3.23 apiece, spread against the sale of 2,000 calls at the higher November 77 strike for one dollar each. The net cost of the transaction amounts to 2.23 per contract. Thus, maximum potential profits of 3.77 are available in the event that shares of the EWZ rally 11% to $77.00 by expiration next month. Plain-vanilla call buying is another tactic employed by bullish investors today. Some 2,500 calls were purchased at the March 2010 80 strike for a premium of 2.70 each. Finally, 1,000 calls were coveted by…
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Commodity Reversal Sees Bulls Charging in Potash

Today’s tickers: POT, LVS, WYE, TGT, WMT, HGSI, AXL, SBUX & GDX

POT – Shares of the fertilizer and feed products company have rallied 2.5% during the trading session to arrive at the current price of $96.06. Bullish investors rushed in to establish optimistic positions on the stock. A bullish reversal play was established in the near-term September contract by a trader anticipating significant gains by expiration. The reversal involved the sale of 10,000 puts at the September 80 strike price for 75 cents each, which were employed to finance the purchase of 10,000 calls at the higher September 105 strike for 1.80 apiece. The net cost of the trade amounts to 1.05 per contract. The investor responsible for the transaction will begin to amass profits if shares of POT surge approximately 10% through the breakeven price of $106.05 by expiration. Bullish sentiment spread to the December contract where it appears that another trader shed puts to finance the purchase of bull call spread. The December 90 strike had about 2,000 puts shed for 7.90 apiece. Premium received on the sale was put toward the purchase of 2,000 calls at the December 100 strike for 9.25 each, which was offset by the sale of 2,000 calls at the higher December 130 strike for 2.15 per contract. The investor received an 80 cent credit for his trouble and stands ready to add to his gains if shares breach $100.00 by expiration. – Potash Corporation of Saskatchewan, Inc. –

LVS -  Profit taking in the January 2011 contract caught our attention this afternoon after one investor “made it big” by utilizing call options on the casino operator. Shares of LVS had attained upward gains earlier in the trading day but are currently lower by more than 0.5% to $12.81. It appears that the trader originally purchased 20,000 calls at the January 15 strike price for 1.70 apiece back on July 9, 2009 when shares closed at $7.42. At that time implied options volatility read 97%. Today he sold the lots to close out the position for 4.35 per contract. If this is indeed what took place, he will have banked gains of 2.65 per contract for a grand total of $5,300,000. This assumes no attached interest in the underlying shares. Implied option volatility has declined during this time to stand at 87% today, negatively impacting the premium of these options, which likely helps…
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Elan Reversals Indicate Bearish Sentiment

Today’s tickers: ELN, NOK, WYE, ELX, GERN, VALE, NVDA & EXC

ELN – The neuroscience-based biotechnology company headquartered in Dublin, Ireland, jumped onto our ‘most active by options volume’ market scanner after a massive bearish reversal was initiated on the stock. Shares are currently lower by more than 5% to $6.59. It looks as though one trader sold 30,500 calls at the January 2010 10 strike price for 50 cents apiece in order to finance the purchase of 30,500 puts at the January 5.0 strike for 74 cents per contract. The net cost of getting long the protective put options amounts to 24 cents. We note that the existing open interest present at both strike prices exceeds the volume traded today. But, it does not appear that this trade represents an attempt to close a previously established position. – Elan Corporation PLC

NOK– The manufacturer of mobile devices has experienced a share price decline of more than 3% to stand at $14.55. We observed a number of bearish trades by investors active on the stock today amid a rating initiated as ‘underperform’ by analysts at BMO Capital Markets. Traders appear to be bracing for significant declines in the price of the underlying as the October 11 strike price saw more than 11,000 put options purchased for 32 cents apiece. Shares would need to plummet 27% from today’s price before profits begin to amass for put-holders at the breakeven point of $10.68. Additional evidence of bearish sentiment was seen at the January 2010 20 strike price where 5,400 calls were shed for 39 cents per contract. – Nokia Corporation

WYE– A sudden frenzy of bullish call activity on the pharmaceutical company was picked up by our scanners this afternoon amid a slight 0.5% decline in shares to $45.12. It appears that the investor or investors responsible for the call action expect Wyeth’s shares to move higher. Perhaps such sentiment stems from speculation regarding the proposed Pfizer-Wyeth merger, which will be put to a shareholder vote at Wyeth on July 20, 2009. In the nearer-term August contract, it looks as though a long call position was rolled to a higher strike price resulting in fresh buying of some 5,000 calls at the August 50 strike price for 15 cents apiece. The calls appear to have been rolled from the existing open interest at the lower August 45 strike where 5,000 lots look
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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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Chinese ETF sees more call option action

Today’s tickers: FXI, XL, AIG, WYE, EEM, JAVA, GIS, BK, SLM & C

FXI iShares FTSE/Xinhua China 25 – Shares are up by approximately 1.5% to stand at $27.96. The Chinese ETF appeared on our ‘most active by options volume’ market scanner after one investor purchased 40,000 in-the-money calls at the March 27 strike price for an average price of 55 cents per contract. The investor snagged the chunk of calls at a low premium earlier today relative to the current premium on the calls of 1.35. It looks like this trader offset the cost of the purchase by selling 40,000 calls at the April 30 strike price for a premium of 63 cents. Thus, he pockets a credit of 8 cents on the trade. As long as shares remain above $27 by Friday, this investor will have the right to collect 4,000,000 shares of the underlying stock at the strike price. But, by selling the calls in April this trader has capped upside gains at a maximum of 3.0 if shares happen to rally to $30 by expiration. The sale effectively provides him with an exit strategy in April.

XL XL Capital Limited – Shares of the property and casualty insurance firm have rallied 7.5% to $4.43 on the heels of AIG’s surge today. One investor looking for further upside gains purchased 6,400 calls at the March 5.0 strike price for 13 cents apiece. If shares can continue to rebound in this fashion and rise by 12% from its current price, then this trader would begin to profit at the breakeven share price of $5.13.

AIG American International Group – Outrage at $165 million in bonuses paid out to employees of the firm’s financial products division while taking in TARP funds at the same time apparently could not detract from AIG’s share price, which is soaring upwards by 40% to $1.35. While government appointed CEO Edward M. Liddy is getting reamed out at the Congressional hearings today, options investors have been busy trading calls across multiple contracts. Traders were heavily favoring the call side and skewed the call-to-put ratio to more than 4.5 calls to every put in action today. At the April 3.0 strike price, optimists picked up 3,700 calls for 10 cents each. Despite the huge rally today, shares would need to continue upwards by another 129% in order to reach the breakeven point at $3.10 by…
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Phil's Favorites

Thomas Cook: tourism experts explain the travel company's collapse

 

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Thomas Cook: tourism experts explain the travel company's collapse

Courtesy of Anna Hillingdon, Bournemouth University and John Fletcher, Bournemouth University

The shock of Thomas Cook’s collapse may create reverberations that travel much further than the 150,000 holid...



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Zero Hedge

China Secretly Ordered NBA Commissioner To Fire Rockets' GM Over Hong Kong Tweet

Courtesy of ZeroHedge View original post here.

NBA Commissioner Adam Silver revealed on Thursday that the Chinese government insisted the league fire Houston Rockets general manager Daryl Morey over a now-deleted October 4 tweet supporting the protesters in Hong Kong, according to Time

...



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Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...



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Insider Scoop

Citigroup Appoints New Head Of Asia Pacific Business

Courtesy of Benzinga

American multinational financial services corporation Citigroup Inc. (NYSE: C) has appointed Peter Babej as the new chief executive officer of its Asia Pacific region, a memo sent to staff by Citi global CEO Mike Corbat shows. Babej previously served as the bank’s global head of financial institutions group.

He joined Citi in 2010 to co-head the company’s financial institutions...



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The Technical Traders

I mentioned this before, and you need to know - Take it or Leave it!

Courtesy of Technical Traders

I mentioned this already so just ignore if you are not interested, but just a reminder that you registered to get my weekly free analysis, you have likely read my articles or watched the analysis videos which we have been nailing nearly every market move this year, but for some reason, you stopped? 

Why did you stop? This is IT! This is the ONE THING…that SINGLE trading and investment newsletter that’s going to turn into the greatest decision you’ve ever made.

In fact, we are about to enter a new trade and could last about 55 days but you need to join us in the member’s only area to find out exactly how to trade it fo...



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Chart School

Review of Andrew CardWell RSI with Wyckoff price waves

Courtesy of Read the Ticker

RSI measures relative strength of price action of a set period versus prior set periods. It helps review the price swings or waves, the power of each price thrust into new ground, or lack of it. Price thrust like many things relies on energy, and energy is not a constant, it has a birth, a life and a death and relative strength helps us see that cycle. 

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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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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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