Posts Tagged ‘XL’

Wary Options Players Pick Up Franklin Resources Puts

Today’s tickers: BEN, NVDA, XL & BLL

BEN - Franklin Resources, Inc. – Put options on the provider of investment management and related services through subsidiaries Franklin, Templeton, Mutual Series, Bissett, Fiduciary and Darby, are more active than usual this morning. It looks like some traders are taking a cautious stance on the stock, and perhaps with good reason. On May 2 the stock managed to rally to within $0.20 of its February 16 52-week high of $130.97, but between those two dates, BEN’s shares dropped nearly 13.5% to as low as $113.34 on March 15. Imagine put buyers are long the stock. Longs could be concerned about Franklin Resources’ failure to hit a higher-high recently, but not so worried that they’re ready to ditch the stock all together. Holding put options on BEN serves to alleviate fears of a pullback and allows traders to benefit in the event that the stock pushes higher over the next couple of months. BEN’s shares are currently down 0.60% to stand at $126.35 as of 11:40am in New York. Investors traded more than 3,600 puts at the June $120 strike on open interest of 913 contracts. It looks like the majority of the puts were purchased today for an average premium of $2.28 a-pop. Put buyers profit, or realize downside protection, should BEN’s shares plunge 6.8% from the current price of $126.35 to breach the average breakeven point on the downside at $117.72 by expiration day next month. An alternative interpretation of the put activity on BEN is that investors are placing outright bearish bets on the stock. Traders employing this type of strategy are looking to profit from a sharp decline in the price of the underlying by expiration. The rise in demand for put options on Franklin Resources helped lift the overall reading of options implied volatility on the stock 3.2% to 22.35% in early-afternoon trade.…
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Carter’s Earnings Cancel Sends Implied Options Volatility Skywards

Today’s tickers: CRI, RDC, XL, VIX, XHB, XRX, EFA, WYNN, BIDU & XHB

CRI – Carter’s Inc. – The more than 20,500 option contracts exchanged thus far today on the children’s apparel company trumps existing open interest of just 3,342 lots by a factor of 6. Shares of Carter’s are suffering significant erosion after the firm announced plans to delay its third-quarter earnings release, originally scheduled for this evening, perhaps until November 12, 2009. News of the postponement sent shares tumbling 25.5% lower to $21.16. Investor uncertainty jumped through the roof as evidenced by the massive 66% rise in option implied volatility this morning to an intraday high of 90%. Bullish investors took advantage of today’s declines by trading near-term call options. One trader put on a ratio call spread by purchasing 1,000 calls at the in-the-money November 20 strike for 2.30 apiece, and by selling 2,000 calls at the higher November 25 strike for 55 pennies each. The net cost of buying the calls is reduced to 1.20 per contract. The effective breakeven price of $21.20 on the transaction allows the investor to profit by expiration in November if shares of CRI rise at least 4 cents. Maximum potential profits of 3.80 per contract are available if the stock recovers up to $25.00. Losses would begin to accumulate if any rally lifted the share price above $28.80.

RDC – Rowan Companies, Inc. – Option traders scooped up put options on the provider of contract drilling services while shares slumped 2.75% to $24.90. The January 2010 22.5 strike had at least 1,400 puts purchased for an average premium of 1.16 apiece. The now in-the-money January 25 strike attracted traders who picked up 1,300 puts for about 2.15 each. Bearish sentiment spread to the April contract where another 2,000 puts were coveted at the April 22.5 strike for 2.02 a-pop. Finally, the most action took place at the in-the-money April 25 strike where 9,800 puts were purchased for an average of 3.18 each. Perhaps put-buying investors are aiming to protect the value of long positions in the underlying. Otherwise, traders placing bearish bets on RDC hope to accumulate profits on further share price weakness over the next several months.

XL – XL Capital Ltd. – Bullish investors took aim at XL Capital put options in the January contract this afternoon. Shares of XL are slightly higher by less than 0.25% to…
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Popular Bank Shares Surge as Option Player Stakes a Claim

Today’s tickers: BPOP, LNCR, EEM, XLK, XL, PALM, LIZ & MI

BPOP - The ‘popular’ bank popped up on our screens this afternoon after a large-volume risk reversal was established on the stock. The massive trade was likely the work of an investor with knowledge of commercial banks as approximately 60,000 contracts were exchanged on BPOP amid a more than 12% rally in shares of the underlying to $2.60. It appears the trader purchased 30,000 now in-the-money October 2.5 strike calls for an average premium of 33 cents apiece. He funded the purchase of the calls by selling 30,000 puts at the January 2.5 strike for 43 cents each. The investor received a net credit on the transaction of 10 pennies per contract. The motivation is perhaps that this individual is swimming with the rising tide of financial names today and expects a far larger rally lifting shares towards $3.75-resistance level. If this is the case, he is likely to exercise the calls by October’s expiration and take delivery of the underlying shares to ride with the stock’s upward momentum. Even if the move continues somewhat, it would likely reverse the structure of this trade to his advantage. – Popular, Inc. –

LNCR - The provider of oxygen and respiratory therapy services attracted option bulls today with shares of the firm standing more than 13% higher for the session to $29.85. Option implied volatility on LNCR exploded 50% higher from a low of 32% this morning to an intra-day high of 48%. The burst in volatility is likely due to increased investor demand for calls on the stock as well as greater uncertainty regarding future price movements in shares of Lincare. Perhaps the rise in uncertainty stems from news that Deutsche Bank raised LNCR’s target price from $33.00 to $38.00 today and maintained their ‘buy’ rating on the stock. Investors gobbled up 2,200 September 30 strike calls for an average premium of 31 cents. The contracts will expire worthless unless shares breach the $30.00-level to land in-the-money by Friday. Bullish sentiment spread to the October 30 strike where traders coveted 2,400 calls for about 71 cents premium. Investors long the calls will begin to amass profits if shares rally through the breakeven point at $30.71 by expiration in October. – Lincare Holdings Inc. –

EEM - The emerging markets exchange-traded fund jumped higher on our ‘most active by options volume’ market scanner…
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American Express Investor Trades Puts for Calls

Today’s tickers: AXP, EFA, XL, LXK, AVP, WERN, ISRG & CHK

AXP – An investor hoping for a medium-term rally in AXP put on a bullish reversal in the October contract. Shares of the global payments and travel company are currently trading a wee-bit higher, up 0.25% to $28.94. The reversal involved the sale of 7,500 puts at the October 26 strike price for a premium of 1.45 each spread against the purchase of 7,500 calls at the higher October 31 strike for 1.85 apiece. The investor paid a net 40 cents for the transaction. He will realize profits on the trade if shares can rally 9% higher to breach the breakeven point at $31.40 by expiration. Interestingly, we essentially observed the antithesis of the trade we just described, last Friday July 17, 2009. Rather than getting long call options, an investor last week sold calls at the October 30 strike to buy put options at the October 25 strike. The direction in which the price of the underlying moves over the next few months will determine whether today’s bullish reversal or last week’s risk reversal result in profits to those individuals responsible for the trades. – American Express Co.

EFA – Shares of the exchange-traded fund have dipped 0.25% to stand at $47.63 this afternoon. The EFA caught our attention after a couple of bullish reversals were established in the December and January 2010 contracts. One investor sold 5,000 puts at the December 49 strike price for a premium of 3.90 apiece in order to purchase 5,000 calls at the same strike for 2.72 each. The trader received a net credit of 1.18 per contract for the transaction. Additional profits are available if shares rally above $49.00 by expiration at the conclusion of 2009. Another bullish-reversal was enacted at the January 49 strike price, although the trade involved the sale of 1,100 puts against the purchase of 1,100 calls for a net credit of 1.53 to the investor. – iShares MSCI EAFE Index ETF

XL – The provider of insurance and reinsurance coverage edged onto our ‘hot by options volume’ market scanner after a large-volume transaction was initiated in the January 2010 contract. Shares of XL are currently off by 2% to $12.53. At first glance, the 20,000 put options purchased at the January 5.0 strike price for 35 cents apiece, smells of bearish. However, it appears that
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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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Zero Hedge

BofA Is "So Bearish, It's Bullish", But Here Are The Signs The Top Is Near

Courtesy of ZeroHedge View original post here.

One week after BofA CIO Michael Hartnett pointed out the biggest asset bubble in the central bank era, where so-called tech "disruptors" (which we previously called e-commerce) have now surpa...



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The Technical Traders

Gold Rallies As Fear Take Center Stage

Courtesy of Technical Traders

Gold has rallied extensively from the lows near $1560 over the past 2 weeks.  At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.

We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018.  Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.

The one thing all skilled traders must consider is the longer-term fear that is build...



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Phil's Favorites

Nondisclosure and secrecy laws protect Bloomberg - not the women who sued him

 

Nondisclosure and secrecy laws protect Bloomberg – not the women who sued him

Billionaire Mike Bloomberg and Sen. Elizabeth Warren had a heated exchange. AP Photo/John Locher

Courtesy of Elizabeth C. Tippett, University of Oregon

Billionaire and former New York City Mayor Michael Bloomberg received a lot of flak at the Feb. 19 Democratic debate for his refusal to release employees who sued his company from nondisclosure agreements.

He admitted to having a “few nondisclosure agreements,” after Sen. Elizabeth Warren ...



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Kimble Charting Solutions

Precious Metals Eyeing Breakout Despite US Dollar Strength

Courtesy of Chris Kimble

Gold and silver prices have been on the rise in early 2020 as investors turn to precious metals as geopolitical concerns and news of coronavirus hit the airwaves.

The rally in gold has been impressive, with prices surging past $1600 this week (note silver is nearing $18.50).

What’s been particularly impressive about the Gold rally is that it has unfolded despite strength in the US Dollar.

In today’s chart, we look at the ratio of Gold to the US Dollar Index. As you can see, this ratio has traded in a rising channel over the past 4 years.

The Gold/US Dollar ratio is currently attempting a breakout of this rising channel at (1).

This would come on further ...



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Insider Scoop

68 Stocks Moving In Friday's Mid-Day Session

Courtesy of Benzinga

Gainers
  • Trans World Entertainment Corporation (NASDAQ: TWMC) shares climbed 120.5% to $7.72 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.
  • Celldex Therapeutics, Inc. (NASDAQ: CLDX) fell 39.8% to $3.1744. Cantor Fitzgerald initiated coverage on Celldex Therapeutics with an Overweight rating and a $8 price target.
  • TSR, Inc. (NASDAQ: TSRI) gained 36.2% to $8.17.
  • ...


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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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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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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

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Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

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Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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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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