Posts Tagged ‘Bear Put Spread’
Wednesday, June 8th, 2011
The much-ballyhooed Apple Worldwide Developers Conference was held Monday, and Steve Jobs was there in his ever-present turtleneck to offer the keynote address. As expected, among the product team’s major announcements was a new operating System – OS X Lion – and the iCloud service that will sync a user’s personal information (email, contracts, calendars, iBooks, song purchases, and more) among Apple devices and the web. Example – buy a song on your iPad and it will be available to download on your iPhone without having to plug anything in.
This week, however, Apple shares have dropped 3% in a solid demonstration of “buy the rumor, sell the news.” In the two weeks leading up to this meeting, the stock rose roughly 4% and has sharply backpedaled beginning in early-afternoon trading on Monday.
Perhaps investors were hoping for an iPhone 5 announcement or were underwhelmed by the unveilings they did hear. Either way, the reaction is making Apple investors wince, at least for a little while. (more…)
Tags: AAPL, Apple, Bear Put Spread, Bull Call Spread
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Friday, February 18th, 2011
Investors may have a renewed interest in U.S. Steel (NYSE:X) Corp. this week after a Goldman Sachs analyst upgraded the stock. The covering analyst booted his overall rating to “buy” from “neutral,” lifted his earnings forecasts through 2013, and raised his 12-month price target by 23% to $75.
In a note to clients, the Goldman analyst referenced “overdone” worries about a recent dip in scrap prices and in fact projects rising steel prices. Against this backdrop, U.S. Steel is in a good position to benefit as it has “one of the best cost positions on the raw materials,” the analyst noted. (more…)
Tags: Bear Put Spread, Long Call Condor, Options Strategies, U.S. Steel, X
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Thursday, February 3rd, 2011
Verizon Communications Inc. (NYSE:VZ) has seen a significant increase in volume in 2011. While part of this is attributable to an overall market increase in trading activity, the impending availability of the iPhone has also sparked interest among investors.
Since the January 11 announcement that Apple’s smartphone is coming to the VZ network on February 10, VZ shares have been virtually flat after a mid-month pullback. Wall Street’s short-term outlook has been mixed on the stock. While Deutsche Bank recently downgraded the stock from buy to hold, Goldman Sachs added it to its conviction buy list, noting that the carrier’s “appeal to investors should improve over the course of the year.” (more…)
Tags: Bear Put Spread, Buy Write, Covered Call, iPhone, Verizon Communications, VZ
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Thursday, January 6th, 2011
It’s a new year, and analysts are adjusting their opinions on stocks and sectors. This week, Goldman Sachs (NYSE:GS) expressed a bit of optimism on the newly resuscitated General Motors (NYSE:GM), initiating coverage on the stock with a “buy” rating.
The covering analyst set a 12-month price target of $43, representing about 16% of upside from current levels. He noted, “GM is ideally positioned to take advantage of the cyclical … and secular auto demand opportunities” and added, “we think the stage is set for profitability not seen since the 1970s, which is not fully discounted in the shares.”
December 28 was the first day banks involved in GM’s IPO were allowed to rate the shares. That day, four firms issued reports on the automaker, two of which gave “outperform” ratings and two of which rated the stock an “overweight.” Price targets for the upcoming 12 months ranged from $42 to $50. (more…)
Tags: Bear Put Spread, Diagonal Call Spread, General Motors, GM, Options Trading Strategies
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Tuesday, December 21st, 2010
The February options series opened for business in Wells Fargo (NYSE:WFC) yesterday and one large-scale options investor appears to have swooped in to extend a bearish trade. Wells shares are up 9.5% in the past month and have gained slightly more than that year-to-date, but this investor evidently expect the banking giant to experience some moderate downside during the next couple of months.
In mid-session trading on Monday, large blocks traded on the January 27.50 put and the February 25 and 28 puts. Looking at volume, open interest, and pricing trends, it appears as though the January puts were sold to close while a bear put spread was opened in the February series. All of the volume changed hands right around the same time and all of the activity was marked as spread trading. (more…)
Tags: Bear Put Spread, options trading, Options Volume, Wells Fargo, WFC
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Tuesday, December 21st, 2010
With General Motors (NYSE:GM) available again for public trading, Ford Motor (NYSE:F) has gone back to sharing the trading spotlight. But this doesn’t take away from the stock’s impressive performance; Ford shares are up 68% year to date and have climbed nearly 470% during the past two years.
Last week, Mad Money host Jim Cramer reiterated his bullish take on Ford, noting that, “earnings power is huge and the balance sheet is getting better … it would not shock me to see Ford at $20 to $25 next year.” A move to $20 would be a 20% jump in the stock; a move to $25 would mean a gain of almost 50% from current levels. (more…)
Tags: Bear Put Spread, Buy Write, Covered Call, F, Ford Motor, Option Strategies
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Wednesday, November 10th, 2010
Last week during a Mad Money broadcast, host Jim Cramer had some positive things to say about Chesapeake Energy (NYSE:CHK). He noted that the energy company is “very well run” and likes Chesapeake’s plans to expand further into the oil market rather than limiting itself to the natural-gas business.
CHK is off about 10% year-to-date but has enjoyed modest gains in the past month or so. The natural-gas picture is similar; the commodity fell from near $6.75 (per million British Thermal Units) in January to $3.50 in mid-October but has now bounced back to around $4.10. Oil, on the other hand, has been range-bound between $75 and $90 a barrel all year and is approaching the upper end of this trading range.
As winter approaches, opinion is often mixed for commodities themselves and the companies that provide them. One school of thought thinks cold temperatures are a definite boon for natural-gas and electricity companies that power the nation’s heaters. Others believe this hypothesis is always built into the shares already, leading to potential downside if the winter winds up being mild. (more…)
Tags: Bear Put Spread, Chesapeake Energy, CHK, Stock Replacement Strategy
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Tuesday, October 26th, 2010
Some investors who like the Internet-search sector but who can’t or don’t want to pay $617 per share for Google (NASDAQ:GOOG) shares have taken an international approach with Baidu.com (NASDAQ:BIDU). The so-called Google of China, BIDU is up more than 160% YTD, gaining 41% in the last three months alone and recently overtaking the psychologically important $100 per share mark.
Last week, ahead of the company’s positive earnings surprise on Thursday evening, brokerage firm Kaufman Brothers upped its 12-month price target on the shares to $115. This is a 34% increase from its earlier target of $86. On Monday, with earnings out of the way until February, HSBC adjusted its price target to $116 from $80. It seems as though the professionals are being somewhat guarded in terms of the amount of upside in the near term, but they seem comfortable shifting their outlooks to a “new normal.” (more…)
Tags: baidu, Bear Put Spread, BIDU, Long Call, Options Strategies
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Tuesday, October 5th, 2010
Ford Motor (NYSE:F) got the week off to a good start, rising almost 5% Monday on the heels of a vote of confidence from Morgan Stanley. The brokerage firm initiated coverage on the automaker with an “overweight” rating and a 12-month price target of $20, which is 55% north of the stock’s current level.
The covering analyst argued that Ford is well positioned to enjoy strong sales over the news few reporting periods. He also opined that investors are currently underestimating the company’s revenue potential. His estimates for Ford’s sales are $115 billion this year and $129 billion next year, with earnings per share expected at $2.60 (above the Street’s consensus view of $1.83).
Today’s move sent the stock sharply higher, easily outperforming the downtrending broader market. F is now within striking distance of the 13 level, above which it hasn’t traded since early April. Technical-analysis fans may have their eye on this strike as it could prove to be support (once it is hurdled) or resistance. (more…)
Tags: Bear Put Spread, F, Ford Motor, Synthetic Long Stock
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Wednesday, September 29th, 2010
Wal-Mart’s (NYSE:WMT) plan for world domination has extended to the Cape of Good Hope. The world’s largest retailer has announced its intention to spend nearly $4.8 billion on the South African chain of Massmart low-cost retail stores. The Congress of South African Trade Unions (Cosatu) quickly voiced its displeasure, noting they will “oppose the setting up of any [Wal-Mart] stores in [the area].”
It’s the never-ending debate … Wal-Mart argues that its low prices save the community money. Opponents argue that the retailer treats its employees unfairly by not allowing unionization (among other complaints).
This type of drama notwithstanding, WMT is a rather boring, range-bound stock. Since the end of the 90s, WMT shares have been chugging along sideways between 45 and 60, with very few visits outside of this range. (more…)
Tags: Bear Put Spread, Covered Strangle, wal-mart stores, WMT
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