Trading Tips Blog

Traders bet on company heading higher. The February 2020 $135 call options on Eli Lilly and Company (LLY) saw a 20-fold rise in volume, going from 164 open contracts to over 3,380 trade hands. With 64 days to go until expiration and with shares trading around $128.50, the option will move in-the-money with a 5 percent rally in shares. Given the option price around $1.95, the option buyer stands to profit at expiration if shares hit $137 or higher. The option trade comes as ...
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Rise in put-buying suggests drop in shares. Multiple options trades on Apple (AAPL) suggested a potential decline in shares. Of the trades made with high volume, the most interesting was the July 2020 $265 put option. That trade saw a six-fold rise in volume with nearly 600 contracts trade. Shares trade around $280, implying at least a $15 per-share downside, or about a 5.3 percent drop. With 212 days until expiration, any move down in Apple shares would allow the option to rally, ...
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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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