Trading Tips Blog

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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Long-dated, in-the-money put trade suggests downside ahead. Over 1,100 contracts traded on the Nordstrom (JWN) April 2020 $40 put option, showing about a 7-fold increase over the prior open interest of 176 contracts. Given the $40 strike and shares trading around $38, the option is already about $2.00 in-the-money, and should move higher dollar-for-dollar with shares if they decline, less any loss in time premium. As the option trades around $5 per contract, it will make money for the buyer at expiration if ...
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Sure, it seems like this stock market can continue to gradually move higher indefinitely. But investors looking for warning signs have gotten a big one in recent weeks. It’s a sign that’s popped up before in the markets that has signaled some poor performance ahead. Trading Tips’ Andrew Packer explains in our latest video ...
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Bet on further rally this month. The December 20th $20 call options on JetBlue (JBLU) saw over 31,665 contracts trade hands, a 19-fold rise over the prior open interest near 1,700 contracts. The bet, expiring in 15 days, will be in-the-money if shares can rise another $1.00 from their current price near $19.00. The buyer paid $0.25, or $25 per contract, so any move higher in JetBlue shares could lead to a big percentage return in the next few days, even if shares ...
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Bet on shares rallying through January. The January 17th, 2020 $45 call options on Vicor Corporation (VICR) saw over 1,100 contracts trade hands against a prior open interest of just over 100, for a 10-fold rise in volume. In order for the option to move in-the-money in the next 44 days before expiration, shares of the company will need to rally about $4 per share from their current price near $41, about a 10 percent increase. Vicor, a manufacturer of modular power ...
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Bet on shares moving 20 percent higher by late January. The January 17th 2020 $280 call options on Amgen (AMGN) saw a 21-fold increase in volume with over 3,100 contracts trading hands. Shares of the company would need to rally about 19 percent from their current price near $234 for this out-of-the-money call to expire with any value. The option buyer paid around $0.10, or just $10 per contract, so it’s a cheap bet on shares moving higher in the next few ...
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Call buying indicates further rally this month. With 18 days until expiration, the December 20th $36 call options on Peloton Interactive (PTON) saw a 20-fold rise in volume, from 127 open contracts to over 2,600. As shares surged last week to $35, the option is merely $1 out-of-the-money, and a further rally could move it in-the-money. However, at a price over $2.15 per option, the option buyer needs to see shares rise to over $38 to make money at expiration. Peloton, a maker of ...
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