Trading Tips Blog

Healthcare services company Cardinal Health (CAH) has been trending higher in the past few months, and even recently set a new 52-week high. One trader sees shares pulling back by the start of next year. That’s based on the January 2024 $55 puts. With 260 days until expiration, 4,000 contracts traded compared to a prior open interest of 135, for a 30-fold rise in volume on the trade. The buyer of the puts paid $0.68 to make the bearish bet. Shares recently ...
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The stock market is an index of a number of companies. And it’s largely weighted by market cap. That index can change all the time, and for any number of reasons. One reason may involve the bankruptcy of an index member company. That’s the case with the S&P 500. First Republic Bank is no more, having been seized by regulators and having its deposits sold off. But it’s the S&P 500, not the S&P 499. The index needs a new member. Traders ...
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CD&R Investment Associates, a major holder of Beacon Roofing Supply Inc (BECN), recently added 99,880 shares to their holdings. The buy increased the fund’s stake by 1 percent, and came to a total cost of $6 million. This is the second buy from this fund so far this year. A company President bought 3,850 shares in March, paying just over $250,000 to increase their holdings by 43 percent. Overall, insider buying has been far greater than sales over the past two ...
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Hotel alternative Airbnb (ABNB) has slid about 22 percent over the past year, but the stock is up over 50 percent from its lows in 2022. One trader sees a further decline ahead for the company. That’s based on the May 12 $115 puts. With 9 days until expiration, 5,369 contracts traded compared to a prior open interest of 112, for a 48-fold rise in volume on the trade. The buyer of the puts paid $2.89 to make the bearish bet. Airbnb ...
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During a gold rush, most prospectors won’t find much, if any, gold. The real winners are those who supply prospectors with tools that they need, such as picks and shovels. Today, these suppliers don’t even need to provide a physical tool. And they can profit from selling a service with a recurring revenue. That’s where cloud service companies come into play. Spending is slowing, even as it’s grown 19 percent over the past year. Pick and shovel plays in this market are ...
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Lourenco Goncalves, President and CEO at Cleveland-Cliffs (CLF), recently bought 100,000 shares. The buy increased his holdings by 2 percent, and came to a total cost of $1,496,350. He was joined by an EVP who bought 7,300 shares. The buy increased his holdings by 2 percent, and came to a total price of $108,548. And a director bought 1,500 shares a day later, for $22,703. Insiders have been more active as buyers than sellers over the past year. Overall, insiders own ...
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Regional bank PacWest Bancorp (PACW) was hit hard in March’s banking crisis. Shares are now down 67 percent over the past year. But one trader sees a long-term rebound ahead. That’s based on the January 2025 $10 calls. With 626 days until expiration, 5,135 contracts traded compared to a prior open interest of 100, for a 51-fold rise in volume on the trade. The buyer of the calls paid $4.05 to make the bullish bet. Shares recently traded slightly over $10, making ...
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Analysts spent the first few months of 2023 warning about an earnings recession. And so far, the data suggests that it’s here. Companies are slowing down overall. The good news? Analysts may have been too dour, so many companies have beaten the low expectations going into their earnings report. Nevertheless, the next few months may see the market trade sideways and see a selloff as this latest earnings season starts to slow down. Investors can use such a pullback to buy industry ...
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