Posts Tagged ‘XME’

AMR Corp. Call Buyers Abound

Today’s tickers: AMR, TBL, XME & RJET

AMR - AMR Corp. – Options traders are picking up call options on AMR Corp. after the parent company of American Airlines and American Eagle Airlines reported increases in passenger traffic for the month of April. Shares in AMR are up 5.85% in early-afternoon trade to stand at $6.51. It looks like options strategists purchased more than 11,000 calls at the June $7.0 strike for an average premium of $0.25 apiece today. Traders profit if shares in the airline operator surge 11.4% over the current price of $6.51 to exceed the effective breakeven price of $7.25 by June expiration. Open interest patterns at the June $7.0 strike suggest traders started snapping up the calls as early as last Friday. Investors buying the calls ahead of today’s substantial move higher in the price of the underlying are being rewarded for booking bullish bets on the carrier in advance. Traders paid an average premium of $0.13 apiece for the calls during the past 6 days, while investors buying the contracts today paid more than two times that amount for the same options.

TBL - Timberland Co. – Shares in footwear and apparel maker Timberland Co. dropped faster than a felled tree following the weaker-than-expected first-quarter earnings report released ahead of the opening bell this morning. The stock declined as much as 30.7% to touch down at an intraday low of $28.81 after the company missed estimates for the first time in seven quarters, posting net income of $0.35 a share, against the average analyst forecast of $0.59 a share. In the days leading up to the earnings announcement some options traders picked up what used to be fairly deep out-of-the-money put options. The massive drop in TBL shares today sent premium on the now deep in-the-money…
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Fickle Friday – Google Goes Down as Costs Inflate

Well who’d have thunk it? 

The cost of doing business is rising and GOOG happens to be one of those businesses that lacks pricing power as their rates are generally set through an auction process and their users have to VOLUNTEER to pay more money to advertise.  Most advertisers on Google are on fixed budgets, like MSM advertisers and Google has done a great job of replicating that model.  Why then, should it be surprising if a maturing Google begins to look more like a traditional media outlet than a dot com company with exploding growth?  

Don’t get me wrong, we love Google long-term but we did short them as well as BIDU into Google earnings as we felt Google would disappoint enough to spook BIDU investors as well.  We’re taking the short money and running and looking for some bullish plays now – the drop from $630 last month to $545 today is plenty of froth blown off the top for us to get long-term interested again.  As you can see from the tag cloud of the Conference Call, growth is still there, especially in mobile display ads (Android a bit disappointing) and no major negatives.  I’m not going to write a whole thing about GOOG though, there are thousands of people doing that and our Members know well enough where I stand.  I’m more interested in examining the bigger picture.  

We expected Q1 earnings to be rough and we’ve already seen FDX, NKE, ORCL, RIMM, FAST, FCS and AA struggle so hopefully you don’t have to be hit on the head with another whole week of earnings before you get a little more cautious.  Next week we hear from C, HAL, LLY, TXN, BK, GS, INTC, IBM, SYK, USB, VMW and YHOO on Monday and Tuesday and then we’re off to the races with hundreds of companies reporting each week for the rest of the month.  Our job in the first few weeks of earnings season is to get a feel for the quarter and, so far, that feeling is rough.  

It’s all about inflation, of course and don’t say we didn’t warn you about that one!  We went more  bearish up at those 100% lines we’ve been watching and now the question really is – how bad was it?  Inflation is, after all, our long-term BULLISH premise.  We don’t think corporations
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Tenet Healthcare Receives Bullish Three-Legged Options Combo Play

Today’s tickers: THC, F, TIVO, HIG, LVS, XME, AET & SHW

THC – Tenet Healthcare Corp. – Shares of the provider of health care services surged 9.39% today to $6.29 following the passage of health-care reform legislation through the U.S. House of Representatives. Intriguing bullish options trading transpired on Tenet Healthcare during the current session as investors secured positions that yield profits if the firm’s shares continue to appreciate through expiration in January 2011. One optimistic player enacted a three-leg options combination play by selling short put options to partially finance the purchase of a debit call spread. The investor picked up 10,000 calls at the January 2011 $7.5 strike for a premium of $0.65 apiece, and sold 10,000 calls at the higher January 2011 $10 strike for $0.10 each. Next, the trader shed 10,000 puts at the January 2011 $5.0 strike for $0.55 premium apiece. The investor’s combination play was essentially enacted at zero cost because of the financing provided by the sale of higher-strike calls and out-of-the-money put options. Maximum potential profits of $2.50 per contract are available to the Tenet-bull if shares of the underlying stock jump 59% from the current price to $10.00 by expiration next year. The short position in put options implies the trader is willing to have Tenet’s shares put to him at $5.00 each should the put contracts land in-the-money ahead of expiration day in January. Options implied volatility on the stock slumped 20.9% this afternoon to 46.67% following the passage of the health care bill in the House.

F – Ford Motor Co. – Bullish options activity on the automobile manufacturer picked up as the trading day progressed amid a 4.5% rally in the price of the underlying stock to $13.90. One optimistic individual initiated a bullish risk reversal transaction in the June contract to position for continued upward momentum in the price of Ford’s shares through expiration. The investor sold 5,000 puts at the June $10 strike for a premium of $0.23 per contract in order to partially offset the cost of buying the same number of call options at the higher June $16 strike for $0.44 apiece. The net cost of the reversal play amounts to $0.21 per contract. Thus, the investor responsible for the trade stands ready to accrue profits if Ford’s shares surge 16.60% over the current price to surpass the breakeven point at $16.21 by expiration…
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Western Digital in the Hot Seat

Today’s tickers: WDC, XLF, EEM, RRI, MYL, XHB, ROK, IACI, & XME

WDC – The manufacturer of hard disk drives has enjoyed a 3% rally today to stand at $31.31. Near-term bullish bets were initiated by option traders expecting further gains in the stock. It appears that some investors established call spreads on WDC by purchasing 14,000 calls at the now in-the-money August 31 strike price for an average premium of 1.77 each, and simultaneously selling 14,000 calls at the higher August 35 strike for about 37 cents per contract. The net cost of the spreads amount to approximately 1.40 apiece. Call-spreaders will begin to realize profits on today’s transaction if WDC can climb 3.5% higher to the breakeven point at $32.40. Maximum profits of 2.60 would be attained by investors if the stock increases to $35.00 by expiration. Finally, plain-vanilla call buying was observed at the August 32 strike where some 3,200 calls were coveted for an average premium of 1.12 per contract. We note that the volume of more than 45,433 contracts seen on WDC today represents 45% of the total existing open interest on the stock of 101,598 lots. – Western Digital Corp.

XLF – The financials ETF has climbed 1.5% higher to $12.61. Notable bullish action was observed at the December 13 strike price this afternoon where it seems some 35,000 calls were purchased for an average premium of 93 cents per contract. Shares of the XLF would need to rally 10% higher and surpass the breakeven point at $13.93 in order for traders to begin to amass profits by expiration at the conclusion of 2009. – Financial Select Sector SPDR

EEM – A mess of deep in-the-money put purchases were initiated on the emerging markets fund today amid a 0.5% increase in the price of the underlying shares to $35.60. The greatest volume was seen at the March 2010 38 strike price where about 7,400 puts were picked up for 5.70 apiece. The March 40 strike appears to have had 2,700 puts purchased for 7.00 each while the higher March 41 strike had 1,200 puts bought for 7.71 per contract. Put-buying continued at the March 42 strike price with 1,600 lots lifted for a premium 8.46 each. The higher March 43 strike had 2,300 puts purchased for 9.22 apiece while the March 44 strike had 1,000 puts coveted for a whopping 10.01 per contract.
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Zero Hedge

Stocks Slump After Quad-Witch; Bonds, Bullion, & Bitcoin Jump

Courtesy of ZeroHedge. View original post here.

Without the quad-witch magic, stocks unable to hold gains as bonds, bullion, and bitcoin all see safe-haven bids...

Chinese stocks trod water largely overnight after a big week, with tech and small caps leading the drop...

European stocks drifted lower for the 3rd day in a row, despite an excited open...

Ugly day for Trannies ...



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Phil's Favorites

Corporate boards are supposed to oversee companies but often turn a blind eye

 

Corporate boards are supposed to oversee companies but often turn a blind eye

Courtesy of Siri Terjesen, American University Kogod School of Business

A lot of giant companies are getting into big trouble these days.

When Boeing 737 Max aircraft crashed in Indonesia and Ethiopia, killing a total of 346 people in October 2018 and March 2019, the disasters raised serious questions about the safety of the aviation leader’s anti-stall system.

When some 5,000 Wells Fargo employees fra...



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Kimble Charting Solutions

Wilshire 5000 Creating A Triple Top? An Important Breakout Test Is In Play!

Courtesy of Chris Kimble.

The stock market has been on fire of late, rallying up to the edge of price resistance on several indexes. Today, we look at one of those stock market indexes: the Wilshire 5000.

The Wilshire 5000 tracks all of the stocks in the US market, so it is a broad-based index that carries significant importance when gauging the health of the overall US stock market.

Looking at the long-term “weekly” chart above, it is pretty clear that the index is at an important price juncture.

The Wilshire 5000 spent the last 25 years trading within a rising price channel (1)...



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Insider Scoop

Jefferies Upgrades Deere, Cites 'Significantly Improved Farmer Income Outlook'

Courtesy of Benzinga.

Farmer buying power will remain pressured for 2019, but this will change for the better next year and will help support Deere & Company (NYSE: DE), according to Jefferies.

The Analyst

Jefferies' Stephen Volkmann upgraded Deere from Hold to Buy with a price target lifted from $150 to $190....



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Chart School

Formula for when the Great Stock Market Rally ends

Courtesy of Read the Ticker.

When valuations for the boring water company or the boring electric company is trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong.

This is when a seriously over valued market is screaming at you.

Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT). 

To see when water company's (and such like) are nearing the crazy FANG like valuations a review of the Dow Jones Utility Index channel shows us how history can repeat. The c...

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ValueWalk

The "Tesla Killer" Car Is Nowhere In Sight

 

The “Tesla Killer” Car Is Nowhere In Sight

By Jacob Wolinsky, ValueWalk

Here’s some catnip for the Tesla bulls on this email list: my analyst, Kevin DeCamp, a longtime TSLA shareholder and car owner, took a test drive of the Jaguar I-PACE and, while it “looks great and is fun to drive… it is lacking in a few areas where Tesla really shines.” He concludes that “Tesla may end up killing itself, but the “Tesla killer” car is nowhere in sight.”

The Tesla Killer Hasn’t Arrived Yet: My Test Drive of the Jaguar I-PACE

By Kevin DeCamp

As a long-time, devoted Tesla...



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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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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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