Huge Activity In DAL Might Be Hedging Short Stock

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Delta Air Lines, Inc. (DAL) provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company’s route network gives it a presence in every domestic and international market.  DAL is currently trading around $36.18 in a 52 week range of $22.71 – 42.66. The company’s stock has been outperforming the market this year with shares increasing 31.92% year to date. Today, a trader bought 20000 DAL Dec14 40.0 Calls for $0.90. This order involves this trader laying out $1.8 million in total premium.

While this huge bet looks bullish on the surface, it is possible that a trader is hedging a short stock position in DAL. The stock traded 7.2 million shares today, and this order controls 2 million shares. While this is a very large order, it is not necessarily ‘unusual’. DAL crossed below the 200 day moving average of $35.50, changing hands as low as $35.18 per share. Also, if we look at the Ichimoku chart using the 5-minute bar, we see that DAL is trading below the Cloud, indicating downward momentum building in the stock. Therefore, this order could indicate bearish sentiment on the stock, which is confirmed by the Ichimoku Cloud, or could indicate that a trader is rolling a bullish position out to December.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the DAL Dec14 40.0 Calls for $0.90
Risk: $90 for every 1 lot

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

GoPro Hits All-Time Highs As New Camera Development Is Leaked

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GoPro, Inc., GPRO, develops hardware and software solutions to alleviate consumer pain points associated with capturing, managing, sharing and enjoying engaging content. The Company’s mountable and wearable cameras and accessories, which the Company refer to as capture devices, enable professional-quality capture and exceptional versatility. GPRO is currently trading around $88.82, hitting an all-time high today as investors gear up excitement in light of rumors that the company is building a more affordable, budget camera.

Leaked information indicates that the new camera, which unlike their flagship model,  will have noWiFi or Bluetooth connectivity, no 4K video mode, and no touch display. The device will reportedly have a one-touch QuikCapture button, high quality 1080p 30fps and 720p 60fps video, 5-megapixel camera with 5-frame-per-second burst photo mode, and a microSD card slot for upto 32GB storage. GoPro’s affordable camera will come with a non-removable, rugged waterproof case, 2.5 hours of battery life, and a built-in microphone.

Price point for the new device has yet to be determined, yet investors are viewing the new information favorably for the wearable device company. GoPro is currently trading at a lofty forward price to earnings multiple of 93x, and forward price to sales multiple of 7.5x. Meanwhile, short interest in the stock has increased rapidly, as the possibility of $100 share price might be in the not-too-distant future.

Shares continue to trade higher in today’s session, maintaining momentum above the Ichimoku cloud and trading at higher-than-average volume.

Trader Puts On Bearish Trade as AVP Hits 52-Week Low

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Avon Products, Inc. (AVP) is a manufacturer and marketer of beauty and related products. The Company’s product categories are Beauty and Fashion & Home. Beauty consists of color, fragrance, skincare and personal care.  AVP is currently trading around $12.62 in a 52 week range of $12.65 – 22.86. The company’s stock has been underperforming the market this year with shares decreasing 26.48% year to date. Today, a trader bought 6880 AVP Nov14 12.0 Puts for $0.45. This order involves this trader laying out over $300,000 in total premium. AVP is trading at its 52 week low, and this position more than likely indicates that this trader believes the stock is headed even lower. As the common adage goes, ‘The trend is your friend’, and the stock is trading below the Cloud, meaning this trader is banking on more downside for AVP.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Buying the 6880 AVP Nov14 12.0 Puts for $0.45
Risk: $45 for every 1 lot

Greeks of this Trade:
Delta: Short
Gamma: Long
Theta: Short
Vega: Long

 

 

6880 AVP Nov14 12.0 Puts $0.45

Trader Takes a Bullish Position In T-Mobile (TMUS)

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T-Mobile US, Inc. provides mobile communications services under the T-Mobile, MetroPCS, and GoSmart brands in the United States, Puerto Rico, and the U.S. Virgin Islands. It offers postpaid and prepaid wireless voice, messaging and data services, and wholesale wireless services. TMUS is currently trading around $28.50 in a 52 week range of $24.90 – 35.50. The company’s stock has been underperforming the market this year with shares decreasing 15.21% year to date. Today, a trader sold 16700 TMUS Oct14 27.0 Puts at $0.28. This order involves this trader collecting just over $460,000 in total premium credit. This position could be a hedge on short stock, or bullish speculation on the upside. TMUS trades an average 1.4 million shares day, and this order controls 1.6 million shares. This indicates a very strong support level at $26.72, since any close lower than the 27 strike will force this trader to buy stock. TMUS is trading below the Ichimoku Cloud, indicating that price momentum could be pushing the stock lower, however, put selling is one of the strongest bullish indicators of Unusual Option Activity.

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

The Trade:
Selling the TMUS Oct14 27.0 Puts at $0.28
Risk: Stock going to $0

Greeks of this Trade:
Delta: Long
Gamma: Short
Theta: Long
Vega: Short

JBL Earnings After the Bell Today

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Jabil Circuit, Inc. (JBL) is a provider of worldwide electronic manufacturing services and solutions. Jabil provides electronics design, production and product management services to companies in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, solar, storage and telecommunications industries.  JBL is currently trading around $20.78 in a 52-week range of $15.30 – 24.13. The company’s stock has been outperforming the market this year with shares increasing 19.14% year to date.

The electronics manufacturer is scheduled to announce earnings today after the bell. In July, Jabil Circuit announced its Board of Directors had authorized the repurchase of up to $100 million worth of shares of the company’s common stock. CFO Alexander Forbes was quoted during the last conference call saying, “Our third fiscal quarter performed largely as planned and is highlighted by a strong balance sheet performance, driven by significant cash flow from operations and a total cash position of $1.3 billion. We believe the strength of our balance sheet positions us well as we consider strategic investments in key growth areas in fiscal 2015.” While the expectations of management might be positive, the historical data tells a slightly different story.

Historical data shows that for the past 8 earnings reports, JBL has moved an average of 7.4%, with 5 out of 8 last reports moving the stock to the downside. The near-term at-the-money straddle is implying a 8.3% move in the stock. By comparing historical data to current implied data, we can infer that implied volatility is 1% higher than the historical mean, suggesting more tension and increased interest in JBL options. Accounting for historical vs. implied data, we are neutral-to-bearish on this name.

DISCLAIMER:

KeeneontheMarket.com” (“KOTM”) is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of KOTM are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.
IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any individual, group, or entity will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Getting Bullish on YHOO

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Yahoo! Inc. (Yahoo!) is a global technology company. Through the Company’s technology and insights, Yahoo! delivers digital content and experiences, across devices and globally. The Company provides online properties and services (Yahoo! Properties) to users, as well as a range of marketing services designed to reach and connect with those users on Yahoo! and through a distribution network of third-party entities (Affiliates). YHOO is currently trading around $38.88 in a 52-week range of $30.02 – 44.01. The company’s stock has been underperforming the market this year with shares declining 3.58% year to date.

YHOO shares have sold off recently in light of the Alibaba IPO. On Monday, a whopping 106 million Yahoo shares changed hands, almost triple the daily average. YHOO owns 22% of BABA, and investors are using YHOO to hedge against a possible downward movement in BABA. BABA has yet to become optionable, and traders are either selling stock short, or buying puts on YHOO to hedge their long BABA positions. We believe that this downward move in YHOO is temporary, and have gotten bullish on the stock

The Trade: Buying the YHOO Nov 40-43-46 Call Fly for $.42 debit

Risk: $42 per lot

Reward: $2.58

Greeks Of The Trade

Delta: Long

Gamma: Long

Theta: Short

Vega: Long

BBBY Earnings After The Bell Today

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BBBY reports earnings after the bell today, and investors are eager to see what the home furnishing’s giant has in store.

Bed Bath & Beyond Inc. is a chain of retail stores, operating under the names Bed Bath & Beyond, Christmas Tree Shops, Harmon and Harmon Face Values, buybuy BABY and World Market or Cost Plus World Market. The Company sells a range of domestics merchandise and home furnishings.  BBBY is currently trading around $62.76 in a 52-week range of $54.96 – 80.82. The company’s stock has been underperforming the market this year with shares declining 21.66% year to date.

Morgan Stanley’s home-furnishings survey conducted in August was released Monday, and found almost 80% of shoppers at Bed, Bath & Beyond in the past three months listed the company’s 20% off an-item coupon as what drove them to the store, much higher than other factors including selection or quality of merchandise. Analysts surveyed by FactSet estimated the company earned $1.14 a share, down from $1.16 a share. The retailer in June cut its profit outlook for the second quarter to $1.08 to $1.16 a share. Increased usage of coupons and online spending are expected to be hurt profit margins.

Historical data shows that for the past 8 earnings reports, BBBY has moved an average of 6.1%, with 6 out of 8 last reports moving the stock to the downside. The near-term at-the-money straddle is implying a 6% move in the stock, which is right in line with past performance.

 

DISCLAIMER:

KeeneontheMarket.com” (“KOTM”) is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of KOTM are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.
IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any individual, group, or entity will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

 

DRP Continues To Head Higher After OptionHacker Flags UOA

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Shares of Dr. Pepper Snapple Group (NYSE: DPS), the Plano, Texas-based soft drink company, has steadily carved out new all highs in 2014. Shares are already up over 37% in 2014, having traded in a 52-week range of $43.18-$65.43.

At least one institution seems to think the original “King of Beverages” is headed higher. Last Friday at 2:05 pm EST, a trader came in to buy 5,755 DPS Nov 70 Calls for $0.65 in what was labeled an opening position.

In terms of total risk premium, this trade isn’t exceptional – only about $374,075, not a huge number for unusual options activity. However, should these calls expire in-the-money, the trade would control about 575,000 shares, or around a third of the average daily volume traded in DPS. The market was also $0.55-$0.65, with the trader paying the ask-price being indicative of strong level of conviction.

Within minutes of coming across our scanner, these Nov DPS 70 Calls traded $0.75-$0.80, and eventually moved to $1.00-$1.05 before the end of Friday’s session.

Monday’s session saw DPS shares hit a new all-time high of $65.43.

OptionHacker Flags Another Absolute Blowout Winner in DD

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E. I. du Pont de Nemours and Company (DD), commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Éleuthère Irénée du Pont. DD is currently trading around $68.88 in a 52 week range of $56.46 – 69.75. The company’s stock has been underperforming the market this year with shares up 5.96% year to date. Options traders seem to think that this trend will continue as order flow in DD has been decidedly bullish during the last few trading sessions. On Monday, a trader bought 2000 DD Fri 9/26 65.5 Calls (Wkly) @ $0.52. This is a bullish order and involved this trader laying out $100,000 in total premium. The stock rallied today on news that Trian Fund, a significant stakeholder in DuPont, launched a campaign to break the chemical giant into two separate businesses.

The Trade:
Buying the DD Fri 9/26 65.5 Calls (Wkly) @ $0.52 debit
Risk: $52 per 1 lot

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

(Full disclosure: I have no position on in this stock)

 

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long:http://bit.ly/11f0L9u.

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

 

OptionHacker Detects AVNR For a HUGE Blowout Winner

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AVANIR Pharmaceuticals, Inc. (AVANIR) is a pharmaceutical company focused on developing and commercializing therapeutic products for the treatment of central nervous system disorders. AVNR is currently trading around $10.96 in a 52 week range of $2.62 – 11.38. The company’s stock has been outperforming the market this year with shares increasing 225.6% year to date.

On Friday, OptionHacker detected a large block of calls being bought in the Sept and Oct options for AVNR. Based on this unusual option activity, our trader’s established positions in both strikes at around $.50 and $1.50 per contract, respectively. News broke early monday morning that AVNR announced positive results from its phase II clinical trial of AVP-923, a promising treatment for agitation in patients with Alzheimer’s disease. The stock gapped up dramatically higher at the open, and reaching 52-week highs of $11.38 on above average volume. Our traders exited their positions at around $2.45 and $3.40, providing over a 500% combined return on the move. This is just another example of the early detection power of OptionHacker.

For more information, please visit www.OptionHacker.com

Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long:http://bit.ly/11f0L9u.

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.