Posts Tagged ‘YELP’

Yelp Call Options Revisited

Yesterday we noted heavy call option activity in Yelp ahead of that company’s first-quarter earnings report after the close of trading on Wednesday (click here for yesterday’s note). The most traded contracts on the stock prior to the earnings release were the regular May expiry $60 strike calls, with the bulk of the more than 14,000 contracts in traded volume likely purchased at a premium of $3.50 each. Shares in Yelp closed Wednesday at $58.32 and well off the lowest intraday level of $54.68.

Shares in the name are up sharply on Thursday morning after Yelp reported a first-quarter loss of $0.04 a share, beating the average of analyst expectations. The stock popped more than 10% during the first 25 minutes of the trading session to as high as $64.38. The sharp move in the price of the underlying pushed the premium on the now in-the-money 16May’14 $60 calls to $6.30 at 9:55 a.m. ET, an 80% increase in the value of the contracts overnight for buyers who paid $3.50 per contract on Wednesday. Open interest in the May $60 strike calls, which was 1,878 contracts as of yesterday, jumped to 18,763 today following heavy trading in the prior session. It’s still early in the session, but as of 10:00 a.m. ET, only 230 of the calls have changed hands, suggesting traders are holding onto the contracts for now.

Chart – Premium on YELP 16May’14 $60 strike calls rises


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Yelp Options Buzzing Ahead Of Earnings After The Bell

Shares in Yelp are down more than 3.0% at $56.90 on Wednesday afternoon, just hours before the company is set to report first-quarter earnings. The impending earnings release has options volume on the stock running at approximately twice the average daily level, with more than 36,000 contracts traded on the stock as of 2:45 p.m. ET. The call/put ratio is hovering near 3.0 at present, largely due to heavy trading in regular May expiry $60 strike call options. Upwards of 14,800 of the $60 calls traded against open interest of just 1,878 contracts. It looks like most of the volume was purchased at a premium of $3.50 per contract, perhaps by one or more traders looking for glowing reviews from the company about its performance in the first quarter.

As is typically the case with options implied volatility in the aftermath of company earnings releases, the roughly 110% reading of implied volatility on the $60 calls as of the time of this writing may come off following Yelp’s quarterly report, which could drag down the premium on those contracts substantially overnight regardless of the direction shares take following the event. The price of the underlying will need to rip higher in order for the bullish position to make money at expiration next month. Specifically, the trade may be profitable at expiration if shares in Yelp rally nearly 12% over the current price to exceed a breakeven point at $63.50. Investors in Yelp have suffered in recent months, with the share price down more than 40% off a high of $101.75 reached on March 5th

Chart – Shares in YELP down more than 40% since 03/05/14


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Options Strategy Eyes Further Upside In Yelp

YELP – Yelp! Inc. – A sizable three-legged options trade initiated on Yelp this morning appears to be looking for shares in the name to extend gains on a day when the stock rose nearly 9.0% to a new record high of $79.15 following a price target increase to $89.00 from $75.00 at JPMorgan. Shares in Yelp are up roughly 290% since this time last year.

It looks like one trader sold 3,343 of the May $60 puts at a premium of $4.34 apiece in order to partially offset the cost of buying a 3,343-lot May $85/$105 call spread for a premium of $5.64 each. The sale of the far out of the money put options reduces the net cost of the bullish position to $1.30 each. The trade starts making money if shares in Yelp rally another 9.0% over today’s high of $79.15 to exceed the effective breakeven point at $86.30 by expiration. The position could generate maximum potential profits of $18.70 per contract in the event that the price of the underlying soars 33% to $105.00 by May expiration.

As long as Yelp shares exceed $60.00 through May expiration, maximum possible losses on the trade are capped at $1.30 per contract. A stock price above $60.00 but below $85.00 at expiration would result in maximum potential losses. The sale of the May $60 puts adds additional risk in the event that shares in Yelp dip below the striking price as the trader could have the stock put to him at that price if the contracts land in the money at expiration. 


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Above Average Volume In Facebook Options As Stock Pushes Higher

FB – Facebook, Inc. – Shares in Facebook are up 3.9% at $44.32 on Friday afternoon, following a price target increase to $55.00 from $40.00 at SunTrust Robinson Humphrey. SunTrust maintains a ‘Buy’ rating on Facebook.

Options volume on FB is marching higher, topping 475,000 contracts by 1:45 p.m. ET and surpassing the stock’s average daily options volume of approximately 402,000 contracts. Trading in FB calls is outpacing that of puts, driving the call/put ratio to 2.2 as of the time of this writing. Shares in Facebook are up more than 130% since this time last year. 

PKG – Packaging Corporation of America – The manufacturer of containerboard and corrugated packing popped up on our ‘hot by options volume’ market scanner on Friday morning due to heavier than usual trading in October expiry calls. Overall options volume in excess of 2,650 contracts as of the time of this writing is more than nine times the stock’s average daily options volume of approximately 290 contracts.

The most actively traded contracts by volume on PKG today are the Oct $57.5 strike calls, with roughly 1,200 lots in play versus open interest of 467 contracts. Most of the volume appears to have been purchased just after 10:00 a.m. ET this morning for an average premium of $0.37 each. Buyers of the $57.5 calls profit at expiration next month in the event that shares in PKG surge 8.0% over the current price of $53.62 to surpass a breakeven point and new 52-week high of $57.87. Packaging Corp is expected to report third-quarter earnings in mid-October.

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Yelp! Options Buzzing As Shares Rocket Higher

Today’s tickers: YELP, TRLA & CTRP

YELP - Yelp Inc. – Shares in the operator of a website that allows consumers to search for and review local businesses jumped 24% today to a record high of $51.80 after the company reported higher than expected second-quarter revenue after the close on Wednesday and forecast third-quarter sales above the average analyst estimate. Bullish options purchased yesterday ahead of the earnings report are generating sizable gains for some traders today. Of note, trades initiated in the Aug $50 strike calls during the final hour of the trading session on Wednesday. Open interest in the Aug $50 calls increased by roughly 650 contracts overnight, and it looks like much of the volume was purchased for between $0.55 and $0.60 apiece. The sharp rally in the stock today now finds the $50 calls trading at $2.60 each, or approximately four times as much, as of midday in New York. The Aug $50 strike call options are the most traded contracts by volume on Yelp thus far in the current session, with around 2,700 lots in play versus open interest of 1,271 contracts. Time and sales data indicates mixed activity during the first half of the trading day; perhaps some sellers are taking profits while buyers of the options position for shares in Yelp to extend gains in the near term. Overall volume in YELP options is approaching 17,000 contracts as of midday, a level that is nearly four times the stock’s average daily options volume of around 4,300 contracts.

TRLA - Trulia, Inc. – The provider of apps and online tools for homebuyers and the real estate industry reported better than expected second-quarter results and forecast third-quarter revenue above consensus estimates after the close on Wednesday, sending shares in Trulia up as much as 24% on Thursday…
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Mad dash for Yelp options as shares soar

 

Today’s tickers: YELP, MGM & DD

YELP - Yelp, Inc. – Shares in Yelp are screaming higher today, up 26.5% at an all-time high of $32.00 as of 11:35 a.m. ET, after the provider of online consumer reviews of local businesses posted first-quarter sales that handily beat analyst estimates. Double-digit percentage gains in the price of the underlying shares sparked heavy trading in Yelp options on Thursday morning, with volume currently up above 11,000 contracts versus the stock’s average daily volume of around 1,300 contracts. In and out-of-the-money call buying on Yelp today indicates some traders are positioning for the price of the underlying to extend gains in the near term. Bullish traders snapped up calls at the May $30, $31 and $32 strikes this morning, driving volume at each strike well above existing open interest levels. More than 800 calls changed hands at the May $32 strike versus open interest of 46 contracts. The bulk of the contracts appear to have been purchased within the first 10 minutes of the opening bell for a premium of $0.40 each. Sharp intraday gains in Yelp’s shares now find the $32 calls trading at $1.35 each, tripling the value of one or more traders’ positions by lunchtime. Meanwhile, upside calls in play out in the August expiry look for shares in Yelp to rally substantially this summer. Bulls betting on the big move purchased around 425 calls at the Aug. $35 strike for an average premium of $1.95 each. Traders long the calls make money at expiration if the price of the underlying jumps 15% over the current price of $32.00 to top the average breakeven point at $36.95.

MGM - MGM Resorts International – Resort casino operator, MGM Resorts International, reported a surprise first-quarter profit ahead of the opening bell this morning, sending shares in the name up 8.0% to a new 52-week high of $14.90 by midday in New York. Bullish options looking for shares to extend gains in the near term are active today, with calls expiring…
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Facebook Friday – Finally Something to get Excited About?

The World is still going to Hell but LOOK – FACEBOOK!

Ah, Facebook will save us.  They have magical powers and will turn around the $60,000,000,000,000 Global equities markets with their $16,000,000,000 IPO, right?  I mean, who are we to question the power of Social Media – probably the single biggest drainer of productivity in the history of all mankind?  

How many Billions of hours of lost productivity have Facebook's 900M users put in over the past few years?  How much is it worth to turn millions of people into couch potatoes and can those ever-fattening eyeballs be converted into advertising Dollars?  That's the real question as Facebook currently does a pretty crappy job of converting – roughly 1/6th as good at it as Google is.  

That won't matter to the people buying Facebook in a Frenzy this morning as they release about 400M shares at $38 a share and I predicted we'd end the day at $45 but maybe $50 or even $55 on a spike up during the day.  We at PSW don't have much interest in playing these silly stocks until there are puts to buy (5/29) and then, if they are still in this nosebleed range – we will be very excited to short the hell out of this stock, which is really worth $25 tops.  

So we are rooting for Facebook, as it will be two weeks before we can short them with options and we would love to see them at any idiotic valuation at that point.  Even with 900M users, a $100Bn valuation says Facebook's users are worth over $100 each.  Yelps users are worth just $20, Instagram's $30 and Twitter's $70 – but Twitter isn't public either so that valuation is nonsense.  

In fact, no public company values users like Facebook is and 900M means not all these users are Americans or even Europeans, where the average per-capital GDP is about $40,000.  No, we're into Asia and the 3rd World here were it's more like $5,000 per person on average.   Are we really supposed to believe that Facebook will convert just as much revenue from a man who makes 100 rupees a day as they do from the average US consumers on steroids?  

900M Facebook users spend an average of 20 minutes a day on the site.  That works out to 16,000 YEARS of…
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Phil's Favorites

Gulf of Oman attacks: how merchant ships can keep safe in dangerous waters

 

Picture via Pixabay

Gulf of Oman attacks: how merchant ships can keep safe in dangerous waters

Courtesy of Robert McCabe, Coventry University

The latest attacks on two oil tankers in the Gulf of Oman have once again highlighted the vulnerability of merchant ships crossing high risk areas. Both the Front Altair and the Kokuka Courageous sustained significant damage to their hulls in attacks on June 13 that led the the evacuation of the crew. This latest attack mirrors an incident from May, where four vessels, including two Saudi oil tanker...



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Kimble Charting Solutions

Consumer Staple and Yields about to send key message to stocks?

Courtesy of Chris Kimble.

Could the Staples sector and the yield on the 10-year note be on the verge of sending an important message to the stock and bond markets? It sure looks that way.

Staples ETF (XLP) is currently attempting to break above the January 2018 highs at (1). If it does, it would be a breakout of the trading range that has been in play for the past 18-months, as it looks to have created a double bottom last year.

The yield on the 10-year note (TNX)  has declined nearly 35%, since pea...



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Insider Scoop

30 Stocks Moving In Tuesday's Pre-Market Session

Courtesy of Benzinga.

Gainers
  • Moneygram International Inc (NASDAQ: MGI) rose 128.3% to $3.31 in pre-market trading after the company reported a strategic partnership with Ripple. Blockchain payments firm Ripple has made an investment in MoneyGram and will also allow the group to use its XRP cryptocurrency as part of the cross-border payments process. Ripple made an initial investment of $30 million in the money transfer company, made up of common stock and a warrant to purchase common stock. Ripple purchased newly-issued common stock including the shares underlying the warrant from MoneyGram at $4.10 per share.
  • Blue Apron Holdings, Inc....


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Zero Hedge

The Road To Perdition - 10 Cautionary Tenets About US Air Power

Courtesy of ZeroHedge. View original post here.

Authored by William Astore via TomDispatch.com,

The American Cult of Bombing and Endless War

From Syria to Yemen in the Middle East, Libya to Somalia in Africa, Afghanistan to Pakistan in South Asia, an American aerial curtain has descended across a huge swath of the planet.

Its stated purpose: combatting terrorism.

Its primary method: constant surveillance and bombing -- and yet more bombing.

...

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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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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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