Articles from the Experts
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 Option Block 111: The Waffle and Egg Indicator Trading Block: VIX was all over the map today. Stocks opened strong but rumors of an S&P downgrade warning to Germany killed some of the optimism. The ups and downs of trading Groupon. Trading the wheel of fun: keeping an eye on Dollar General and GNC. Odd Block: Unusual activity in Angie’s List - (ANGI), Darden Restaurants, Inc. - (DRI), and American Eagle Outfitters, Inc. - (AEO). Plus an update from last week on RIMM. Xpress Block: John Grigus from OX discusses the Van Eck ETFs and the news concerning ETFs and options. Around the Block: Jobless claims on 12/08. Michigan Sentiment later this week. The ongoing kurfuffle in the Euro zone. RIMM earnings on 12/15. |
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Option Block 110: Worthless December Lottery Tickets Trading Block: A massive explosion to the upside, what was the impetus for the 400 point rally? The S&P 500 has climbed 3% or more in a day 36 times in the past three years compared with 27 times for the nine years before, according to Bloomberg. EU battling to hold itself together. The first of the month means “Options Numbers Day.” Odd Block: Unusual activity in Research in Motion, Ltd. (RIMM) and Barnes & Noble, Inc. (BKS) Xpress Block: Tim Navabi shares the news from Direxion Shares that their 2x bull and bear ETFs will now be converted to 3x. Also, how did OX handle the frenzied rally in the past days? Around the Block: Non-farms tomorrow, but almost a back-burner issue compared to the wild and irrational exuberance in the market recently. VIX finally takes a turn below 30, a long awaited event. |
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Option Block 109: Danger is in the Air Trading Block: A strong move to the upside after the holiday weekend. VIX at 30 yet again – is this becoming the new norm? Strong Black Friday sales compelling market. Metals/commodity rundown.
Odd Block: Unusual activity in MGIC Investment Corp. (MTG); BlackRock, Inc. (BLK), and Charles Schwab Corp. (SCHW). Plus, an update on Guiled (GLID) from last week. Xpress Block: Rob discusses the extreme polarity last week from doom and gloom to consumer uplift on Black Friday. Has there been an uptick of people looking at SPXpm at OX? Around the Block: The afterglow of Black Friday and Cyber Monday are still driving all the major indices up. Dark clouds looming on the horizon in Europe. Groupon playing the mini-widowmaker down 9%. Unemployment, housing numbers, and non-farms later this week. |
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Option Block 108: Super Committee VIX Spreads Trading Block: Dow back in the red for the year. Debt cutting debate concerns hit the market -- reminiscent of the debt debate from August, only you don't see everyone loading up on VIX puts this time. Did they learn their lesson? Could more DC gridlock trigger another debt downgrade? Odd Block: Unusual and interesting activity in: Gilead Sciences Inc. (GILD) NII Holdings, Inc. (NIHD) Strategy Block: Andrew Giovanazzi from Option Pit discusses getting short the VIX without overloading on risk. Around The Block: Super committee debate dominates the outlook for this week -- how do you position for this? Apple below the 375 handle for the first time in a while -- maybe the best is behind Apple? |
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Option Block 107: The End of the AAPL Bulls? Trading Block: Housing starts better than expected, yet the market shrugged off an usually strong indicator for movement. S&P breaks through 1225 -- a key support level. Apple down in the 375 level. Ford getting crushed -- down $0.40 despite strong October sales. Is the Dec 9/10 put spread a popular sale? Metals down today. AGQ is gaining popularity, could ultra short terms make a difference? Odd Block: Unusual activity in: Ann Taylor (ANN), Louisiana-Pacific Corp. (LPX), and Coca-Cola Co. (KO) Xpress Block: Nelson from OX discusses questions are concerns raised with expiration a day away. A lot of interest around Angie's List, a tech IPO going public today. Is there still a lot of fallout from the MF situation? Strategy Block: Mike Tosaw discusses the simulated index concept. Around the Block: A light earnings and economic week coming up. Apple - Jan 2013 call or put? |
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Option Block 105: A Pod of Sissy girls Trading Block: How to use SPX movement in the downside skew to gauge the sentiment of a particular rally. An uncharacteristic sell-off in Apple -- will they finally lose their grip on the 400 handle? Green Mountain Coffee closed at nearly $41 today, down a whopping 40%. Odd Block: Unusual activity in eBay Inc. (EBAY): A Bullish option strategist appears in online marketplace provider EBAY this morning with the purchase of the January 30-34 call spread for $2.04 on 5,600 by 8,400 ratio and the simultaneous sale of 8,400 January 27 Puts at $1.03. EBAY is slated to release their Q4 earnings on January 18th, two days before these contracts expire. Computer Science Corp. (CSC): A provider of information technology services to government and industry, saw its shares trading lower again today after yesterday’s disappointing 2012 profit forecast. The shares lost 15% yesterday and have drifted down so far this morning. Investors positioning for the stock to continue to decline picked up deep out-of-the-money November and December expiry puts that look for the price of the underlying to suffer additional double-digit declines in the near future. Bears populating the front month picked up more than 700 puts at the Nov. $25 strike for an average premium of $0.58 each, and purchased some 400 put options at the lower Nov. $22.5 strike at an average premium of $0.15 a-pop. The stock was cut to ‘Underweight’ from ‘Neutral’ at JPMorgan today. Xpress Block: Tim Navabi takes the reins at discusses the reverse split of FAS at OX today and talks adjusted options. Around the Block: Disney earnings after the bell - Things are looking good in the house of Mouse, it closed at 34.60, trading about $1 higher in the after-hours. NVDIA after the bell - closed at about 14.5, trading about $0.70 higher. Under Armor, Mastercard, Red Hat and Ulta Salon all had nice small pops before earnings. Oil and TLT have both been on a significant rally. |
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Option Block 104: Piling Onto Groupon Trading Block: A bit of a market turnaround, but mainly a relatively mild day. What a strange place VIX and volatility are in general right now. Priceline (PCLN) earnings today after the close, trading over $500. The frenzy began Friday as Groupon went public -- when will the options go live? A quick metals/commodity rundown. Odd Block: Unusual activity in: McMoRan Exploration Co. (MMR) - Two noticeably bullish option trades in Gulf of Mexico oil and gas producer McMoRan Exploration Co. (MMR) today with investors looking for the stock to climb back to the 16 - 17.50 range over the coming months. The largest trade saw the purchase of 2,000 January 15 Calls and the simultaneous sales of 2,000 January 17.5 and 19 strike calls. This traded for a net debit of $.08 and reach maximum profit if the stock settles at $17.50 by January expiration. A more short term trade saw the purchase of the December 10-16 call spread 1,500 times for $3.55. No news in MMR today to account for today’s activity. Knight Capital Group (KCG) - FRIDAY REVIEW The global financial services firm is seeing bearish option order flow for the second day in a row. Thursday saw new positions opened in the January and April 10 puts with open interest increasing more than twofold in both strikes. Friday's activity was even more eye opening with investors focusing on the 35% out-of-the-money 7.50 strike bearish contacts in the December and January expiries with VWAPs of $.15 and $.32 respectively. Career Education Corp. (CECO) Put selling on the for-profit provider of education services may represent a vote of confidence by at least one options strategist positioning for shares in Career Education Corp. to exceed $7.00 through November expiration. The stock was hammered in the most recent six-month period, declining around 75.0% off its 52-week high of $27.60 on June 2, down to a more than 10-year low of $6.92 last Thursday. CECO’s shares are in recovery-mode today, gaining 5.25% in the first half of the session to trade at $8.40 as of 11:15 in New York. Options traders exchanged some 4,400 puts at the Nov. $7.0 strike against open interest of 1,544 contracts. It appears the majority of these put options were sold for an average premium of $0.10 apiece. Xpress Block: John Grigus discusses the details of the MF Global account, which has brought about stress at OX fielding questions. Around the Block: Earnings! Disney 11/10 - General Motors 11/9 - Cisco 11/9. Also, jobless claims 11/10. |
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Option Block 103: Greece is the Word Trading Block: Greece! The other European countries have finally said enough is enough - they may survive without Greece, but Greece can't survive without them. It looks like the VIX was hedging its own bets, there was a giant relief sell-off like was last week. XLE up over 2% on the day. There's definitely been a lot of movement in energy today, when it feels like things are getting better, people flock towards energy - a good time to be a bull. Gold closed at the highest it’s been in a while, gold and silver are starting to claw their way back after a recent pull-back in the metal world. In the land of collars - the premiums in the weekly have been high enough, especially in GLD, to justify using some of the near term options. Strategy Block: Today feature of the strategy block will be a dual session, split by Andrew Giovinazzi and Mike Tosaw. Andrew starts by enlighten us on the uses of the front spread. What is a 1x2? How do you pick a front spread? With his turn, Tosaw discusses the back spread, including topics on modified stock repair strategies and hedging a front spread with a back spread. Around the Block: Back spreads - with the financials prone there are some opportunities because the volatility is at a point where it's cheap enough since they're moving so much. Keep an eye on Greece - Will they oust their prime minister? Greece is the word! |
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Option Block 102: Turn Off the Idiot Box
Trading Block: Bonds rallied, volatility exploded. MF Global news, combined with inflation and the Japanese efforts to intervene in their currency, provided for a big up day in the dollar. Given the lack of volume, the market had a strong sell-off today. Here in Chicago the Merc and the Board had to come down and say no trading. Gold and silver, they've been down a bit and out of the news spotlight, but could there be another run on it give the lows here?
Odd Block: Unusual activity in: Chesapeake Energy (CHK) - Traders came in and bought 12,000 of the Nov 28 puts, with earning coming out on the 3rd, this may not be a good sign for CHK
The Materials Sector (XLB) - A 12-to-1 put to call ratio in XLB today, 42,000 of the 34 puts and 66,000 of the 31 puts traded. We saw a trader sell about 10,000 of the March 26 puts, a big sell in Dec 29 and buy of Dec 31 puts, this could be traders setting up hedges, looking for ways to get long in the sector. Herbalife (HLF) - Earnings just came out, and in the spirit of Halloween, they were quite scary. Already off 10% before the bell, a very strong sell-off. It seems companies that miss a little bit on their earnings have not been treated well. Strategy Block: Host Mark Sebastian gives a special strategy block, "Turn off the Idiot-Box". If you're an active trading, turn off what CNBC thinks the market may do and watch the market the see what it actually does and you are bound to have better success. Around the Block: Looking for some follow through on last Thursday's big volume move or any stocks that hit new highs and were able to hold on to those highs. A lot of earnings and employment data come out this week, so you may be on the edge of your seat. Tomorrow may be a big day, as people try not to miss another big up-turn. But overall the tone will be set by the international markets. |