Eli Lilly and Co. (LLY) Unusual Options Activity Reaps Profits

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Eli Lilly and Co. (LLY) develops, manufactures, and sells products in two business segments; human pharmaceutical products and animal health products. LLY is trading at $78.19 around the upper end of its 52 week range of $58.50-$79.55. Year to date the stock has outperformed the market rallying,13.73%. The stock ripped up today by about 2.33% or $1.78.

Early in the session a trader bought 3,100 of the LLY June 80.0 Calls for $0.38 when the stock was trading at $77.81. This order was recorded about an hour after the open on OptionHacker, and the stock rose about $1.78 to $79.97 after the trade hit the tape. Over 9,900 contracts have been traded today hinting at bullish sentiment. The LLY June 80.0 Calls for $0.38 have traded as high as $1.15 today making this a profitable trade. This trader is most likely establishing a long position expecting the stock to continue its bullish trend for a few weeks. This stock has been trading above the Ichimoku Cloud for a few weeks now. The Ichimoku Cloud continues to grow and points the technical analysis in the direction of a bullish trend due to an increasing cloud size indicating a hard to reverse trend.

Trade: A trader bought 3,100 of the LLY June 80.0 Calls for $0.38
Risk: $38 per 1 lot
Breakeven: $78.57

If a trader bought a 20 lot of these puts they would have profited $1,540 at the highs on $760 in risk. This is a great example of profitable UOA.

Unusual Options Activity in ITT Educational Services, Inc. (ESI) Yields Incredible Profits

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ITT Educational Services Inc. (ESI) is a provider of postsecondary degree programs in the United States to approximately 55,000 students. ESI is trading at $4.44 around the lower end of its 52 week range of $1.93-$18.83. Year to date the stock has severely underperformed the market this year, falling 53.69%. The stock ripped higher today by about 84.65% or $2.04 during the trading session.

Early on a trader bought 2,309 of the ESI June 3.0 Calls for $0.45 when the stock was trading at $2.60. This order was recorded about an hour after the open on OptionHacker, and the stock rose about $2.00 to $4.60 after the trade hit the tape. Over 2,700 of these June 3.0 Calls have been traded today hinting at bullish sentiment. The ESI June 3.0 Calls have traded as high as $1.65 today making this a very profitable trade. This stock has been trading below the Ichimoku Cloud for a few weeks now until it ripped to the upside in today’s session and continued to trade above the Ichimoku Cloud.

Trade: A trader bought 2,309 of the ESI June 3.0 Calls for $0.45
Risk: $45 per 1 lot
Breakeven: $4.89

If a trader bought a 20 lot of these puts they would have profited $2,400 at the highs on $900 in risk. This is a great example of profitable UOA.

Next Week’s (Week of June 1st) Market Preview

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The first week of June will kick off on Monday with Personal Income and Outlays for April followed by a report of the Purchasing Managers’ Manufacturing Index (PMIs) which provides insight into a select number of companies in the private sector of the economy. Following this release is the ISM manufacturing composite index presenting the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The last report to listen to on Monday is the Construction Spending on residential, non-residential, and public projects. Trends in the construction data most likely carry valuable clues for the stocks of home builders and large-scale construction contractors.

On Tuesday, only one report will be released. The major event to look for is Factory Orders for both durable and non-durable goods. This report most likely correlates with economic growth because that translates to higher corporate profits.

Wednesday has a few more releases to watch out for such as the ADP Employment Report which represents 400,000 U.S. business clients and approximately 23 million U.S. employees working in all private industrial sectors. Next is the International Trade release which breaks down the export, import and trade balances. Many traders will most likely be watching this to see how the strong USD has affected international trade. Three more releases later on Wednesday include the ISM Non-Mfg Index representing more than 375 firms from various sectors across the U.S. The next release will be the Energy Information Administration (EIA) Petroleum Status Report indicating weekly information on petroleum inventories in the U.S. whether extracted here or abroad. Last to be reported will be the Beige Book which is utilized in the Federal Open Market Committee monetary policy meetings and is a compiled list of economic data from the 12 Federal Reserve Districts.

Thursday has only a few reports to be released at the opening bell. First will be the Jobless Claims numbers enlightening the public on unemployment claims over the past week. Following this report is the Productivity and Costs Report which measures the growth of labor efficiency in producing economy’s goods and services which is most likely used as an indicator of future inflationary trends.

The last day of the trading week, Friday, will be releasing one report, but a very detailed one. The Employment Situation will be released and closely watched especially for wage growth, a key metric the Fed has been citing recently.

Key Earnings Reports Next Week

  • After the Bell on Tuesday | Dollar General Corportation (DG)
  • Before the Open on Wednesday | Vera Bradley, Inc. (VRA)
  • After the Bell on Wednesday | Five Below, Inc. (FIVE)
  • Before the Bell on Thursday | J.M. Smucker Co. (SJM)
  • After the Bell on Thursday | Zumiez Inc. (ZUMZ)

Splunk, Inc.’s (SPLK) Earnings Preview, Earnings Out After the Closing Bell

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Splunk, Inc. (SPLK) provides software products for users to manipulate and analyze data regardless of format or source. The stock is currently trading around $69.85 at the upper end of its 52 week range of $39.35-$74.88. The stock has been outperforming the market this year rallying 17.95% year to date. SPLK is scheduled to report earnings after the bell today, and the stock is ripping up ahead of the release. SPLK is higher on the session by around $0.19 or 0.51% ahead of the closing.

Over the past 12 quarters SPLK has rallied on earnings day 8 times with an average move of 9.57%. SPLK appears bullish on a chart going into the release approaching its high of the past 20 trading days of $70.97. Over the past 12 quarters SPLK has rallied from earnings to the nearest options expiration 8 times with an average move of 9.38%. The stock looks as if it could continue its trend and rip to the upside in today’s session. The cloud appears to be consistently changing its trend. Investors are mainly looking to see if Splunk will turn a profit for the first time since its IPO in 2012. Other points to watch for are how the rollout of Splunk light fared in the recent quarter, and how the customer base increase of 7% will affect earnings.

The options market is currently implying a move of around $5.5 or 7.91% in SPLK by this Friday’s close giving us targets of $74.35 and $64.35.

Michael Kors Holding Limited (KORS) Sees Bearish Options Activity after Earnings

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Michael Kors Holding Limited (KORS) is a major player in global luxury apparel and accessories. KORS is trading at $46.62 around the lower end of its 52 week range of $46.10-$98.96. Year to date the stock has underperformed the market by quite a bit selling off 37.91%. The stock dropped today by about 23.04% or $13.96. This move happened after KORS released disappointing earnings before the bell this morning.

Early on a trader bought 9,000 of the KORS June 45.0 Puts for $0.35 when the stock was trading at $49.40. This order was recorded about an hour after the open on OptionHacker, and the stock dropped about $2.78 to $46.62 after the trade hit the tape. Over 16,300 have been traded today hinting at bearish sentiment. The KORS June 45.0 Puts for $0.35 have traded as high as $1.15 today making this a profitable trade. This trader is most likely establishing a short position expecting the stock to continue its bearish trend for a few weeks. This stock has been trading below the cloud for a few weeks now. The Ichimoku Cloud continues to grow and points the technical analysis in the direction of a bearish trend due to an increasing cloud size indicating a hard to reverse trend.

Trade: A trader bought 9,000 of the KORS June 45.0 Puts for $0.35
Risk: $35 per 1 lot
Breakeven: $44.65

If a trader bought a 20 lot of these puts they would have profited $1,600 at the highs on $700 in risk. A great example of profitable UOA.

Is Abercrombie and Fitch Co. (ANF) Unusual Options Activity Ahead of Earnings Hinting at a Move Lower?

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Abercrombie and Fitch Co. (ANF) is a major clothing designer and retailer catering mostly to teens. ANF is trading at $20.56 around the upper end of its 52 week range of $19.34-$45.50. Year to date the stock has underperformed the market by quite a bit, at 28.46%. The stock dropped today by about 1.44% or $0.30. This move happened after an unusually large number of bearish options hit the tape this morning.

Early on a trader bought 3,500 of the ANF May 29th Weekly 18.5 Puts for $0.32 when the stock was trading at $20.73. This order was recorded about half an hour after the open on OptionHacker, and the stock dropped about $0.29 to $20.44 after the trade hit the tape. Over 3,600 contracts of the May 29th Weekly 18.5 Puts have been traded today hinting at bearish sentiment. The May 29th Weekly 18.5 Puts for $0.32 have traded as high as $0.34 today making this a profitable trade. This trader is most likely establishing a short position ahead of ANF earnings later on this week. I will likely look to get short ANF ahead of the earnings release based on the bearish activity in the options market we are seeing.

Trade: A trader bought 3,500 of the ANF May 29th Weekly 18.5 Puts for $0.32
Risk: $32 per 1 lot
Breakeven: $18.18

Major Profits on Unusual Options Activity in Lions Gate Entertainment Corp. (LGF)

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Lions Gate Entertainment Corp. (LGF) is a global company with diversified presence in television programming, home and family entertainment, and motion picture production. LGF is trading at $33.50 around the upper end of its 52 week range of $25.71-$35.75. Year to date the stock has outperformed the market, rallying 4.47%. The stock ripped up today by about 4.60%. This move happened after an unusually large number of bullish options hit the tape this morning.

Early on a trader bought 5,294 of the LGF July 35 Calls for $0.70 at the market price when the stock was trading at $32.99. This order was recorded about an hour and a half after the open on OptionHacker and the stock ripped about $0.46 after the trade hit the tape. Over 8,800 of the July 35 Calls have been traded today hinting at bullish sentiment in the options market. The July 35 Calls have traded as high as $0.95 today making this a highly profitable trade.

Trade: A trader bought 5,294 of the July 35 Calls for $0.70
Risk: $70 per 1 lot
Reward: Unlimited
Breakeven: $35.70

If a trader would have purchased a 20 lot of these calls they would have seen profits of $450 at the highs in a matter of hours. This trade is a great example of hugely profitable unusual options activity.

AutoZone, Inc. (AZO) Prepares to Release its Earnings

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AutoZone, Inc. (AZO) distributes and sells automotive accessories as well as replacement parts in the United States. The stock is currently trading around $690.18 at the upper end of its 52 week range of $491.93-$705.00. The stock has been outperforming the market this year rallying 11.75% year to date. AZO is scheduled to report earnings before the bell on Tuesday the 26th, and the stock is selling off ahead of the release. AZO is lower on the session by around $1.21 ahead of the holiday weekend.

Over the past 12 quarters DE has rallied on earnings day 8 times with an average move of 2.14%. The stock has also rallied 8 times in 12 quarters from earnings day to the nearest options expiration. AZO also appears bullish on a chart going into the release. The stock has been trading above the Ichimoku Cloud since mid-February, and looks as if it could continue higher in today’s session. The Ichimoku Cloud appears to be growing in size indicating a trend that is harder to reverse. This cloud continues 26 bars in the future shrinking only slightly in size still indicating a bullish outlook. Due to the stock’s historical performance on earnings day and strong technical data, it is hard to justify anything but a bullish trade in AZO.

The options market is currently implying a move of around $32 or 4.6% in AZO by next Friday’s close giving us an upside target around $722.18.

What Are Traders Looking Ahead of Deere and Company (DE) Earnings This Quarter?

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Deere and Company (DE) operates in three major segments including manufacturing and distributing, construction and forestry, and financial services. The stock is currently trading at the upper end of its 52 week range of $78.88-$93.78 around $89.71. The stock has been underperforming the market this year rallying a measly 1.25% year to date. DE is scheduled to report earnings before the bell tomorrow, and the stock appears fairly strong ahead of the release. DE is higher on the session by around $0.76 ahead of the report.

Over the past 12 quarters DE has sold off on earnings day 10 times with an average move of 2.63%. The stock has also sold off 10 times in 12 quarters from earnings day to the nearest options expiration. DE also appears quite flat on a chart going into the release. The stock is trading close to the bottom of the Ichimoku Cloud on the daily bar, and looks as if it could break to the downside in today’s session. The Kinjun-Sen line, similar to a 30 period DMA, appears flat on the chart as well. Due to the stock’s historical performance on earnings day and weak technical data, it is hard to justify anything but a bearish trade in DE.

The options market is currently implying a move of around $2.54 or 2.8% in DE by this Friday’s close giving us a downside target around $87.10.

Potential Trade: Buying the DE May 22nd Weekly 88-87 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $87.70

Unusual Options Volume in Lululemon Athletica Inc. (LULU) Reaps Nice Profits

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Lululemon Athletica, Inc. (LULU) is a major player for designing and selling athletic apparel. LULU is trading at $61.03 around the upper end of its 52 week range of $36.26-$70.00. Year to date the stock has increased over the market, by $5.71 or 10.23%. The stock dropped today by about 3.12%. This move happened after an unusually large number of bearish options hit the tape multiple times this morning.

Early on a trader bought 1,290 of the LULU May 29th Weekly 60 Puts for $0.49 at the market price when the stock was trading at $61.72. This order was recorded about half an hour after the open on OptionHacker and the stock dropped about $0.75 after the trade hit the tape. Another trader bought 1,264 of the LULU June 26th Weekly 55 Puts for $1.14 when the stock was trading at $61.37. Over 3,800 contracts of the May 29th Weekly 60 Puts and 2,700 of the June 26th Weekly 55 Puts have been traded today hinting at bearish sentiment. The May 29th Weekly 60 Puts for $0.49 have traded as high as $0.78 today making this a highly profitable trade.

Trade: A trader bought 1,290 of the LULU May 29th Weekly 60 Puts for $0.49
Risk: $49 per 1 lot
Reward: Unlimited
Breakeven: $59.51

If a trader would have purchased a 20 lot of these calls they would have seen profits of $580 at the highs on $980 in risk. This trade is a great example of hugely profitable weekly unusual options activity.