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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Zero Hedge

Atlanta Mayor Set To Reimpose Lockdown As Cases Surge, Defying Gov Kemp, Trump: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • Atlanta reportedly returning to lockdown mode
  • Texas sees another near-record day for new cases, hospitalizations
  • Georgia reopens convention center in Atlanta to treat COVID patients
  • US sees 799 new deaths, lower than yesterday
  • Phoenix mayor says hospital running out of morgue space
  • California positivity rate ticks higher
  • New Jersey rate of spread
  • Trump says Fauci "A nice man", but "he's made a lot of mistakes"
  • Dr. Fauci says 'divis...


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Coronavirus stimulus checks: Wait could be over, suggests Mnuchin

By Aman Jain. Originally published at ValueWalk.

We have already seen President Donald Trump, as well as Senate Majority leader Mitch McConnell talking in favor of another round of stimulus checks this week. Now, on Thursday, Treasury Secretary Steven Mnuchin suggested a second round of coronavirus stimulus checks could be part of the next stimulus package.

Q2 2020 hedge fund letters, conferences and more

Mnuchin backs second coronavirus stimulus checks

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Actually, Mr Trump, it's stronger environmental regulation that makes economic winners

 

Actually, Mr Trump, it's stronger environmental regulation that makes economic winners

Courtesy of Ou Yang, University of Melbourne

Donald Trump has ordered US federal agencies to bypass environmental protection laws and fast-track pipeline, highway and other infrastructure projects. Signing the executive order last month, the US president declared regulatory delays would hinder “our economic recovery from the national emergency”.

Trump withdrew the US from the Paris Agreement for international climate action in 2017 for the same reason. The accord, ...



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Coronavirus's painful side effect is deep budget cuts for state and local government services

 

Coronavirus's painful side effect is deep budget cuts for state and local government services

Washington state cut both merit raises and instituted furloughs as it faced a projected $8.8 billion budget deficit because of the coronavirus. Wolfgang Kaehler/LightRocket via Getty Images

Courtesy of Carla Flink, American University

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Red Hot China Attempting Key Breakout, Says Joe Friday

Courtesy of Chris Kimble

China ETF (FXI) has been “Red Hot” of late? Is it about to run out of steam or will it remain on fire going forward?

This chart of FXI comes from Investors Business Daily and Marketsmith.com. It reflects that FXI is above key long-term moving averages and its RS ratings is moving sharply higher of late.

Line (1) has been support and resistance several times over the past 3-years. The rally of late has FXI ...



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Retail Traders & Investors Squeezed to Buy High-Risk Assets Again

Courtesy of Technical Traders

Yes, we certainly live in interesting times.  This, the last segment of our multi-part article on the current Q2 and Q3 2020 US and global economic expectations, as well as current data points, referencing very real ongoing concerns, we urge you to continue using common sense to help protect your assets and families from what we believe will be a very volatile end to 2020.  If you missed the first two segments of this research article, please take a moment to review them before continuing.

On May 24th, 2020, we published this ...



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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: Saturday, 14 March 2020, 05:51:16 PM

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Comment: Crash in perspective - its Bad, and not over!



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Comment: The Blood Bath Has Begun youtu.be/bmC8k1qmM0s



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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

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Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

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No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

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Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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