Trading Tips Blog

2019 was a great year for the stock market. But don’t pat yourself on the back just yet. Three poor performers in 2019 are ready to lead the market higher in 2020, and make sense as a buy now. Trading Tips’ Andrew Packer explains in our latest video ...
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Traders bet on rally this month. January 24th call options on Conoco Phillips (COP) with a $66 strike price saw a 34-fold rise in trading volume. Going from 108 open contracts to nearly 3,700, the trade is a bet that shares can move at least $0.50 higher from their current price around $65.50. The call buyer paid just under $1.50 per share for the option, so a move to $67.50 will allow the trade to profit at expiration. Shares of Conoco Phillips have been ...
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Traders bet on drop in shares in 2020. The January 2021 $87.50 put options on Texas Instruments (TXN) saw a six-fold increase in volume in trading, going from 104 open contracts to seeing over 630 trade hands. The bet, which has 380 days to play out, would move in-the-money if shares fell by about one-third from their current price near $128. Traders paid about $2.10, or $210 per contract on average, making for an inexpensive market hedge that could soar in value on ...
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Traders bet on drop in shares in the next 9 days. The January 10th $126 put options on Target (TGT) saw a five-fold surge in volume, going from 434 open contracts to over 2,050 trade hands. Expiring in just 9 days, the bet will pay off if shares of the retailer, which gained over 90 percent in 2019, will drop just $2 from its price of $128 per share. The option buyer paid about $0.85, so a move to $125 per share would ...
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Traders bet on further rally. The February 2020 $30 call options on Uber (UBER) saw a 19-fold rise in volume, going from 265 open options to over 5,100 contracts trade hands. Expiring in 52 days, shares trade just under $30, making these options at-the-money. A rally in shares should send the options up dollar-for-dollar, less any loss of time premium. With the buyer paying around $2.15, shares would need to clear $32 in late February for the option buyer to profit at expiration. Considered ...
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Traders bet on further rally in shares. The June 2020 $44 calls on JD.com (JD) saw a 20-fold rise in volume, going from 100 open trades to over 2,000 contracts change hands. Shares currently trade just over $36, so a move to $44 in the next 172 days before expiration implies a 22 percent upside for shares. The option buyer paid about $1.08, or $108 per contract. That’s a low price that could lead to triple-digit returns if shares rally sufficiently. JD.com is an ...
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February call buying suggests further rally. The February 2020 $16 call option on Snap (SNAP) saw a 62-fold rise in volume, going from 182 open contracts to over 11,300 trade hands. With 56 days until expiration, and with shares of Snapchat around $15.85, a 1 percent move higher in the social media firm will move the options in-the-money. At a price of $1.35 per contract, however, the option buyer will see the option trade at a profit come expiration if shares move over ...
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This high-margin business model spells consistent profits. While there are plenty of business models out there for how to operate a company, a great one for shareholders is in the royalty space. Simply put, a royalty company owns a patent or provides capital to another company. When that other company makes a product, a tiny amount of sales go to the royalty company. This provides a number of advantages for the royalty company. They have no production risk, no sales, and can operate ...
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