Trading Tips Blog

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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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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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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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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