Trading Tips Blog

Some traders rely exclusively on market patterns. And there are few patterns as famous as the Santa Claus rally—the propensity for markets to head up in the final weeks of the year. Trading Tips’ Andrew Packer explains in our latest video ...
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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 the ...
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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, giving ...
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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 continue. Shares ...
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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 few ...
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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 rally. Masco ...
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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 the ...
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