Trading Tips Blog

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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Shares of The Walt Disney Company may have gotten ahead of themselves as investors have gotten overly optimistic following a great year for the company. Trading Tips’ Andrew Packer explains in our latest video ...
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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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Traders bet on continued rally. The February $200 call option on Visa (V) saw a 10-fold surge in volume, going from 140 open contracts to seeing over 1,400 trade hands. The bet, expiring in 57 days, is that shares can move up to $200 from their current price near $188. The $12 move in shares is about a 6.4 percent rally. The option buyer paid $1.02, or $102 per contract, making for an inexpensive way to bet on the current rally in shares ...
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