Two big stocks, two bold calls. That describes last Friday’s "Options Action," where the traders got bearish on a financial giant, and bullish on the king of Internet search.
If you thought JPMorgan and agriculture prices have little in common, you’d probably be right. But they do share one characteristic — they are both headed lower, if the traders on Friday’s "Options Action" are correct.
Last Friday’s Options Action was neither bullish nor bearish; it was strictly contrarian. The traders found a way to get bullish on a name almost everyone thinks is in unremitting decline – Best Buy. And they got bearish on Starbuck, a company that the street just loves— with 23 ‘Buy’ ratings and only one ‘Underperform.’
While equity investors long ago discarded RIMM to the unmarked grave of failed tech companies (see Palm, Nokia), options traders see opportunity.
Despite massive call buying a curious thing happened in the options pits: many people lost money. How could that be?
Why did we see a clip of two bears fighting on last Friday’s "Options Action?" Well, because that video basically summed up the whole show.
Amid the excitement over Facebook options, a far less obvious and somewhat overlooked development occurred in the options market: traders piled into IBM calls.
Two big names. Two very different trades. That more or less sums up last Friday’s Options Action.
After the worst week of the year for the S&P 500 and the Nasdaq, Riskreversal.com’s Dan Nathan thinks the scene is set for a global stock swoon over the next few months.
Two bearish trades on two wildly different companies. That more or less sums up last Friday’s Options Action, where the market’s recent rally took a back seat to some decidedly downbeat views on our show.
Citigroup’s earnings appear to have given a lift to the financials, but the real test will come later this week when Goldman Sachs and Morgan Stanley report results.
What could it be that’s causing such heavy put volume in TJX today? With minutes left in the trading day, over 2,800 of the July 37.5-strike puts have traded hands, making it the second most active of all the TJX options.
We all know the stunning statistics about: Lions Gate’s "The Hungry Games"; third biggest open, best March opening, a global weekend haul of $214 million worldwide.
You might be wondering why the Nike April 105- and 100-strike puts are so active today.
Two trades. Two bearish calls. But that’s where the similarities end from Friday’s show.
Investors remain fixed on round numbers these days: Dow 13,000… Nasdaq 3,000… VIX below 20. But there’s another number that had our desk sounding the alarm on the market’s rally: $109.
Going against the herd is never easy, especially when money is on the line, but that’s exactly what our traders did last Friday.
You might be wondering why Bank of America puts are so active today, especially in the May expiry. Do options traders doubt the rally in the banks? Do they view BofA’s prospects as less than rosy? Plausible explanations for sure, but perhaps a simpler reason exists: Friday’s Options Action.
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Do you have a question for the Options Action team? Options Action selects a viewer's question and gives the answer on the show's Make The Call Web Extra video.