Trading Tips Blog

February call buying indicates more upside to shares. Over 18,150 contracts traded on the February 2020 $52.50 call option on Morgan Stanley (MS). This is a 20-fold increase in volume from the open interest of 933 contracts. With 66 days to go before expiration, shares will need to rally about $1.50 or just under 3 percent for the option to move in-the-money. At a cost of around $1.16, or $116 per option, it’s a relatively inexpensive bet that the rally in financials will ...
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Bet on food company rallying higher through June. Over 847 contracts traded on the June 2020 $10 call options on BRF S.A. (BRFS), a 13-fold rise over the prior trading volume of 100. In the next 186 days until expiration, shares of the company will need to rise about $1.50 to hit the $10 strike, or about a 17.6 percent rally in shares. At a price around $0.45, or $45 per contract, it’s an inexpensive bet on shares moving higher in the next ...
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January call buying suggests further rally. Over 2,400 contracts traded on the January 2020 $49 call option on Masco Corporation (MAS), an 11-fold rise in volume from the total prior open contracts of 225. The bet, expiring in 35 days, is for shares to rally another $2, from $49 to the strike price of $49, a 4.2 percent increase. With shares near their 52-week high already, but still in rally mode, the option looks like a leveraged bet on a continuation of the ...
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Tesla unveils Cybertruck and it didn’t go well. The shatterproof glass cracked. And the design, which looked like a combination of a few different cars with a sleek, dystopian film gray to it, got a lot of commentary as well. But the Cybertruck announcement of Tesla Motors could be a game-changing move for the company. Trading Tips’ Andrew Packer explains why in our latest video ...
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March call buying suggests rally. Over 6,800 contracts traded on the March 2020 $29 call options on Enterprise Products Partners (EPD). Against the prior open interest of 879, the trading marks an eight-fold jump in volume. Shares of EPD currently trade just under $28, so the options are a bet on another $1 rise in shares in the next 99 days before expiration, or a move just 4 percent higher. Shares have traded as high as $30 in ...
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Leap-buying suggests solid gains in next year. Over 730 contracts traded on the January 2021 $47 call options on Omega Healthcare (OHI). This is a three-fold jump in volume against the prior open interest of 237. With 401 days until expiration, the option is a long-dated trade known as a leap. Currently, shares of Omega trade around $42.50, the company needs to move at least 10.5 percent higher for the option to trade in-the-money at expiration. Omega is a health care real estate investment ...
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Bet on further move higher in shares through February. Nearly 20,000 contracts traded on the February 21st, 2020 $30 call options in Corning Incorporated (GLW). Against a prior open interest of about 1,550 contracts, it’s a 13-fold jump in volume. With shares trading around $28.80, the option is about 4.1 percent out-of-the-money. Given how shares are trading near the bottom end of their range, a move higher in-the-money in the coming weeks is possible. At a cost under $1.00, each contract cost the ...
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Bet on continued rally though May, 2020. Nearly 4,000 contracts traded on the May 2020 $15 call options on Seaspan Corporation (SSW). Compared to the prior open interest of 553 contracts, it’s a seven-fold surge in volume. Shares trade in the low $13 range, meaning they need to move $2 higher, or about 15 percent, before expiration in May to close in-the-money. The option price of around $0.50, or $50 per contract, means the buyer starts to make money if shares hit $15.50. Seaspan ...
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