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

So You Wanna Be a Stock Picker

 

So You Wanna Be a Stock Picker

Courtesy of 

The stock market has been a treacherous place for the last few months. You wouldn’t know it by looking at the indexes.

I wrote this opening salvo earlier in the week when the S&P 500 was hovering near all-time highs. This morning, due to a new variant in South Africa, stocks are selling off sharply. The Dow Jones Industrial Average, the people’s index, is down over 1,000 points, sitting 5% below the all-time highs from earlier this month.

It’s been a while since we’ve seen these names on the leader and laggard board and I was hoping to never...



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Zero Hedge

"The Omicron Variant" - Magic Pills, Or Solving The Africa Problem?

Courtesy of ZeroHedge View original post here.

Authored by Kit Knightly via Off-Guardian.org,

Yesterday the WHO labelled the sars-cov-2 variant B.1.1.529 as a “variant of concern” and officially named it “Omicron”.

This was as entirely predictable as it is completely meaningless. The “variants” are just tools to stretch the story out and keep people on their toes.

...



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Biotech/COVID-19

The hunt for coronavirus variants: how the new one was found and what we know so far

 

The hunt for coronavirus variants: how the new one was found and what we know so far Scientists find variants by sequencing samples from people that have tested positive for the virus. Lightspring/Shutterstock

Courtesy of Prof. Wolfgang Preiser, Stellenbosch University; Cathrine Scheepers, University of the Witwatersrand; Jinal Bhiman, National Institute for Communicable Diseases; ...



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Politics

The first Thanksgiving is a key chapter in America's origin story - but what happened in Virginia four months later mattered much more

 

The first Thanksgiving is a key chapter in America’s origin story – but what happened in Virginia four months later mattered much more

In the 19th century, there was a campaign to link the Thanksgiving holiday to the Pilgrims. Bettman/Getty Images

Courtesy of Peter C. Mancall, USC Dornsife College of Letters, Arts and Sciences

This year marks the 400th anniversary of the first Thanksgiving in New England. Remembered and retold as an allegory for perseverance and cooper...



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Chart School

Gold and Silver still working higher

Courtesy of Read the Ticker

Using Gann Angles from zero we can time the next run up, and it is near.

The last two days gold and silver are down on the back of central bankers talking the US Dollar higher in a attempt to off set inflation. A rising dollar is a form of tightening. Also the talk of a faster 'taper' has sent interest rates higher. But Luke Gromen knows this cant not last.

@LukeGromen Externally-financed twin deficit nations with insufficient external financing (ie the US, not Japan) cannot abide rising real rates for long.


RTT Comments: What this means a higher US Dollar makes it harder for those outside the US to buy the vast quantity of US Treasuries. 


U...

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Digital Currencies

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

 

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

Safe as houses? iQoncept

Courtesy of Jean-Philippe Serbera, Sheffield Hallam University

Cryptocurrencies have had an exceptional year, reaching a combined value of more than US$3 trillion (£2.2 trillion) for the first time in November. The market seems to have benefited from the public having tim...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

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.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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