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

Ukrainians are divided over Trump's 'quid pro quo'

 

Ukrainians are divided over Trump's 'quid pro quo'

Ukrainians don’t agree on how their president should have handled Trump’s request. Andreas Wolochow/Shutterstock.com

Erik C. Nisbet, The Ohio State University and Olga Kamenchuk, The Ohio State University

As Americans turn their attention to the first p...



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Zero Hedge

Watch Live: Trump Talks Trade At Economic Club Of New York

Courtesy of ZeroHedge View original post here.

Update: President Trump's scheduled speech started a few minutes late, some of his prepared remarks have already hit the tape.

  • TRUMP TO SAY AMERICAN MARKET IS MOST COVETED ON THE GLOBE
  • TRUMP: THOSE WHO WANT ACCESS TO AMERICAN MARKET MUST OBEY RULES
  • TRUMP SAYS FED FAR TOO SLOW IN CUTTING RATES
  • TRUMP SAYS FED PUTS U.S. AT DISADVANTAGE VS OTHER COUNTRIES

And a quote...

"The American Market is the most valuable and coveted market on the globe - tho...



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The Technical Traders

Welcome to the Zombie-land Of Investing - Part II

Courtesy of Technical Traders

In Part I of this research post, we highlight how the ES and Gold reacted 24+ months prior to the 2007-08 market peak and subsequent collapse in 2008-09.  The point we were trying to push out to our followers was that the current US stock market indexes are acting in a very similar formation within a very mature uptrend cycle.

We ended Part I with this chart, below, comparing 2006-08 with 2018-19.  Our intent was to highlight the new price hig...



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Kimble Charting Solutions

Bank Breakout Of Financial Crisis Highs or Double Topping Again?

Courtesy of Chris Kimble

If the saying “So Goes The Banks, So Goes The Broad Market” is true, banks are facing a critical breakout/resistance test in my opinion.

This chart looks at Financials ETF (XLF) over the past 12-years. This chart reflects that a double top took place prior to the financial crisis getting started.

XLF has remained inside of rising channel (1) since the lows in 2012. It hit double resistance at (2), then it declined nearly 25%.

The decline then tested rising support at (3) and a strong rally has followed. The rally now has XL...



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Insider Scoop

Barrington Downgrades Fluent After Earnings Miss, Stock Drop

Courtesy of Benzinga

Fluent Inc (NASDAQ: FLNT) fell short of top- and bottom-line third-quarter estimates. Some suspect the missed metrics herald longer-term underperformance.

The Rating

Barrington Research analysts James Goss and Patrick Sholl downgraded Fluent to Market Perform but maintained a $5 price target....



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Digital Currencies

3 Reasons Why One Trader Didn't "Manipulate" Bitcoin Price To $20K

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin price highs in 2017 were not the result of a single trader on an exchange, the CEO of payment company Circle claims. In a series of tweets on Nov. 4, Jeremy Allaire disputed ...



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Chart School

Gold Gann and Cycle Review

Courtesy of Read the Ticker

Gold has performed well, golden skies are here again. In fact it has been a straight line move, and this is typically unusual and a pause can be expected.

It seems the markets are happy again, new highs in the SP500, US 10 year interest rates look to re bound, negative interest may soften. The US FED has reversed their QT and now doing $250BN (not QE) repo. The main point is the FED has stopped QT, and will do QE forever. The evidence now is the FED put is under market risk and the possibility of excessive losses do not exist. 

Point: If in future if there is market risk, the FED will print it's way out of it.
Subject To: In this blog view. The above is so until the amount required rocks confidence in the US dollar as a reserve currency.&n...



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Lee's Free Thinking

Today's Fed POMO TOMO FOMC Alphabet Soup Unspin

Courtesy of Lee Adler

But make no mistake, if the Fed wants money rates to stay down by another quarter, it will need to imagineer even more money.

That’s on top of the $281 billion it has already imagineered into existence since addressing its “one-off” repo market emergency on September 17. This came via  “Temporary” Repo Man Operations money, and $70.6 billion in Permanent Open Market Operations (POMO) money.

By my calculations that averages out to $7.4 billion per business day. That works out to a monthly pace of $155 billion or so.

If they keep this up, it will be more than enough to absorb every penny of new Treasury supply. That supply had caused the system to run out of money in mid September.  This flood of paper had been inundati...



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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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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:

 

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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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