Stocks on the move Real-Time Equity news
U.S. stock market report
1710 ET-25Nov2008
Option traders take cautious stance before Tiffany results
Upscale jeweler Tiffany & Co has attracted cautious options trading ahead of its quarterly earnings report before the bell on Wednesday. Options volume ran double the usual combined turnover with about 14,000 puts and 4,274 calls traded, according to option analytics firm Trade Alert. Tuesday's top trades included a ratio spread, where the strategist bought 1,000 December $17.50 put strikes and sold two times as many December $12.50 strikes for 85 cents, WhatsTrading.com strategist Frederic Ruffy said. The December $20, January $20, and January $10 put options were also busy, but he noted most of the action was in small-sized trades.
The stock fell 22 cents to $20.83.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1704 ET-25Nov2008
Fed plan boosts Dow, S&P; Cisco sinks Nasdaq
The Dow and S&P 500 gained on Tuesday on optimism that the Federal Reserve's latest rescue package could revive the sagging housing market and free up consumer lending.
For more details, see
Reuters Messaing: charles.mikolajczak.reuters.com@reuters.net
1701 ET 25Nov2008-Options fear gauge suffers largest 3
day point loss
The CBOE Volatility Index fell 5.87 percent to 60.90 as the benchmark S&P 500 rose on optimism that the Federal Reserve's latest rescue program could revive the beaten-down housing market and free up consumer spending. The VIX, the implied volatility measure of near-term S&P 500 index options, suffered its largest three-day point loss of 19.96 points and is down 25 percent from its record close of 80.86 last Thursday. 'Trading has been relatively orderly today and heading into the Thanksgiving holiday,' WhatsTrading.com strategist Frederic Ruffy said, adding that the VIX is 'likely to see light trading tomorrow and not much action at all on Friday.' But historical volatility remains high. The 20-day statistical volatility of the S&P 500 is 78 percent, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1537 ET 25Nov2008
Goldman highlights 50 names as 'buy write' candidates
Goldman Sachs strategists selected 50 equity names as top 'buy write' candidates, where on average, investors can sell 20 percent out-of-the-money calls, collect a 10 percent premium, collect a 1 percent dividend and maintain
31 percent upside over six months. The list includes well
known stocks Research in Motion, Apple Inc, Cisco Systems, Kroger Co , Exxon Mobil and Qualcomm Inc. 'We believe this is an extremely attractive trade in the current environment,' they said in a note to clients. From the list, they selected the equity's option strike that maximizes the premium collected for selling 6-month calls based on Goldman's analyst price targets. Selling covered calls can generate income and cushion against downside risk, they said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1502 ET 25Nov2008
Staples option players seek safety net ahead of Dec results
Option players in Staples Inc snapped up put options as they sought protection before the company's earnings due on Dec. 2, which is next Tuesday. The stock of the world's largest office products retailer fell more than 4 percent to $16.56 after a downgrade. 'The shares lately have challenged the October lows when implied volatility on its options peaked at 106 percent,'
Interactive Brokers Group Andrew Wilkinson said in a note. 'Today volatility is on the rise at 93 percent as put buyers take the initiative seeking downside protection in the December contract where 9,300 puts were traded at the $17.50 strike at a $2.25 premium,' he said. Buyers also rushed to buy 1,250 lots at the $15 strike where cheaper premiums of $1.15 were paid. There was also heavy activity at the $20 strike calls where more than 4,800 lots traded at a mid-market price of 35 cents, he said. January $35 puts were also bought.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1500 ET 25Nov2008-Hedge fund sell-off pressures small-, mid-caps
analyst
Sell-offs related to hedge fund redemption notices have led to a downslide in small- and mid-cap stocks since the end of the third quarter, as hedge funds pare their stakes in these companies, Citigroup analyst Lori Calvasina said in a research note on Tuesday.
Hedge fund ownership stakes are typically deeper in small- and mid-cap companies than in large-cap ones, Calvasina wrote. Energy and materials companies have been particularly hard hit, but telecom, health-care, consumer discretionary and technology sectors have also 'underperformed dramatically.'
Investors should seek companies that have beeb 'inordinately pressured by hedge fund selling,' including Dick's Sporting Goods, Goodyear Tire & Rubber and United Therapeutics, she wrote.
Reuters Messaging: deepa.seetharaman.reuters.com@reuters.net
1432 ET 25Nov2008-Option fear gauge, S&P 500 drop in non
typical activity
The CBOE Volatility Index and the S&P 500 index were both down in unusual trading activity, said Chris McKhann, analyst at optionmonster.com in comments posted on the Web site. The two benchmarks typically move inversely, but late on Tuesday, the benchmark S&P fell 0.95 percent to 843.79 and the VIX, Wall Street's so-called fear gauge, slipped 0.76 percent to 64.21 in afternoon trading. In the derivatives market, the VIX December futures contract rose 0.36 to 59.00 and the January VIX futures stood at 54, down 0.15 after hitting a high of 55.46. 'This also is unusual, as the VIX usually sets the direction for all the futures and normally has the most movement,' McKhann said. The March VIX futures is down, as expected, and dropped 0.73 to 46.05, he added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1411 ET-25Nov2008
Option players turn optimistic on SLM Corp
Shares of Sallie Mae, the largest U.S. student loan company, shot higher after President-elect Obama's comments that money should be made available to let young adults enter college without having to worry about financing, said Interactive Brokers Group analyst Andrew Wilkinson in a note. The stock of Sallie Mae, legally known as SLM Corp, jumped 16.2 percent to $9.18 in afternoon trade. The implied volatility on Sallie Mae options fell around 10 points to 114 percent as optimistic players assigned better prospects for future earnings. Option buyers paid a $1.60 premium for rights to buy the stock at $10 before expiration in the January cycle on some 8,000 contracts earlier in the session. At the same strike in the April series, investors paid $2.60 to reserve rights to buy almost 1,700 lots, he added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1332 ET 25Nov2008-Caterpillar bearish put spreads attract interest
analyst
The government stimulus package might create revenues and profits from the core of the economy outwards, but that is not how an investor played the prospects for shares in Caterpillar Inc, said Interactive Brokers Group analyst Andrew Wilkinson in a note to clients. Shares of the world's largest maker of earth-moving equipment fell 5 cents to $36.29 in afternoon trade. In the options market, a player appeared to add to existing bear put spreads in the December contract in which $35 strike puts, which are below the current share price, were bought 15,000 times while the lower $30 strike puts were sold. Should Caterpillar fumble and its stock falls to $30 and below by December options expiration, the trader would make the maximum profit of $3.92, Wilkinson said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
U.S. stock market report
1710 ET-25Nov2008
Option traders take cautious stance before Tiffany results
Upscale jeweler Tiffany & Co has attracted cautious options trading ahead of its quarterly earnings report before the bell on Wednesday. Options volume ran double the usual combined turnover with about 14,000 puts and 4,274 calls traded, according to option analytics firm Trade Alert. Tuesday's top trades included a ratio spread, where the strategist bought 1,000 December $17.50 put strikes and sold two times as many December $12.50 strikes for 85 cents, WhatsTrading.com strategist Frederic Ruffy said. The December $20, January $20, and January $10 put options were also busy, but he noted most of the action was in small-sized trades.
The stock fell 22 cents to $20.83.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1704 ET-25Nov2008
Fed plan boosts Dow, S&P; Cisco sinks Nasdaq
The Dow and S&P 500 gained on Tuesday on optimism that the Federal Reserve's latest rescue package could revive the sagging housing market and free up consumer lending.
For more details, see
Reuters Messaing: charles.mikolajczak.reuters.com@reuters.net
1701 ET 25Nov2008-Options fear gauge suffers largest 3
day point loss
The CBOE Volatility Index fell 5.87 percent to 60.90 as the benchmark S&P 500 rose on optimism that the Federal Reserve's latest rescue program could revive the beaten-down housing market and free up consumer spending. The VIX, the implied volatility measure of near-term S&P 500 index options, suffered its largest three-day point loss of 19.96 points and is down 25 percent from its record close of 80.86 last Thursday. 'Trading has been relatively orderly today and heading into the Thanksgiving holiday,' WhatsTrading.com strategist Frederic Ruffy said, adding that the VIX is 'likely to see light trading tomorrow and not much action at all on Friday.' But historical volatility remains high. The 20-day statistical volatility of the S&P 500 is 78 percent, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1537 ET 25Nov2008
Goldman highlights 50 names as 'buy write' candidates
Goldman Sachs strategists selected 50 equity names as top 'buy write' candidates, where on average, investors can sell 20 percent out-of-the-money calls, collect a 10 percent premium, collect a 1 percent dividend and maintain
31 percent upside over six months. The list includes well
known stocks Research in Motion, Apple Inc, Cisco Systems, Kroger Co , Exxon Mobil and Qualcomm Inc. 'We believe this is an extremely attractive trade in the current environment,' they said in a note to clients. From the list, they selected the equity's option strike that maximizes the premium collected for selling 6-month calls based on Goldman's analyst price targets. Selling covered calls can generate income and cushion against downside risk, they said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1502 ET 25Nov2008
Staples option players seek safety net ahead of Dec results
Option players in Staples Inc snapped up put options as they sought protection before the company's earnings due on Dec. 2, which is next Tuesday. The stock of the world's largest office products retailer fell more than 4 percent to $16.56 after a downgrade. 'The shares lately have challenged the October lows when implied volatility on its options peaked at 106 percent,'
Interactive Brokers Group Andrew Wilkinson said in a note. 'Today volatility is on the rise at 93 percent as put buyers take the initiative seeking downside protection in the December contract where 9,300 puts were traded at the $17.50 strike at a $2.25 premium,' he said. Buyers also rushed to buy 1,250 lots at the $15 strike where cheaper premiums of $1.15 were paid. There was also heavy activity at the $20 strike calls where more than 4,800 lots traded at a mid-market price of 35 cents, he said. January $35 puts were also bought.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1500 ET 25Nov2008-Hedge fund sell-off pressures small-, mid-caps
analyst
Sell-offs related to hedge fund redemption notices have led to a downslide in small- and mid-cap stocks since the end of the third quarter, as hedge funds pare their stakes in these companies, Citigroup analyst Lori Calvasina said in a research note on Tuesday.
Hedge fund ownership stakes are typically deeper in small- and mid-cap companies than in large-cap ones, Calvasina wrote. Energy and materials companies have been particularly hard hit, but telecom, health-care, consumer discretionary and technology sectors have also 'underperformed dramatically.'
Investors should seek companies that have beeb 'inordinately pressured by hedge fund selling,' including Dick's Sporting Goods, Goodyear Tire & Rubber and United Therapeutics, she wrote.
Reuters Messaging: deepa.seetharaman.reuters.com@reuters.net
1432 ET 25Nov2008-Option fear gauge, S&P 500 drop in non
typical activity
The CBOE Volatility Index and the S&P 500 index were both down in unusual trading activity, said Chris McKhann, analyst at optionmonster.com in comments posted on the Web site. The two benchmarks typically move inversely, but late on Tuesday, the benchmark S&P fell 0.95 percent to 843.79 and the VIX, Wall Street's so-called fear gauge, slipped 0.76 percent to 64.21 in afternoon trading. In the derivatives market, the VIX December futures contract rose 0.36 to 59.00 and the January VIX futures stood at 54, down 0.15 after hitting a high of 55.46. 'This also is unusual, as the VIX usually sets the direction for all the futures and normally has the most movement,' McKhann said. The March VIX futures is down, as expected, and dropped 0.73 to 46.05, he added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1411 ET-25Nov2008
Option players turn optimistic on SLM Corp
Shares of Sallie Mae, the largest U.S. student loan company, shot higher after President-elect Obama's comments that money should be made available to let young adults enter college without having to worry about financing, said Interactive Brokers Group analyst Andrew Wilkinson in a note. The stock of Sallie Mae, legally known as SLM Corp, jumped 16.2 percent to $9.18 in afternoon trade. The implied volatility on Sallie Mae options fell around 10 points to 114 percent as optimistic players assigned better prospects for future earnings. Option buyers paid a $1.60 premium for rights to buy the stock at $10 before expiration in the January cycle on some 8,000 contracts earlier in the session. At the same strike in the April series, investors paid $2.60 to reserve rights to buy almost 1,700 lots, he added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1332 ET 25Nov2008-Caterpillar bearish put spreads attract interest
analyst
The government stimulus package might create revenues and profits from the core of the economy outwards, but that is not how an investor played the prospects for shares in Caterpillar Inc, said Interactive Brokers Group analyst Andrew Wilkinson in a note to clients. Shares of the world's largest maker of earth-moving equipment fell 5 cents to $36.29 in afternoon trade. In the options market, a player appeared to add to existing bear put spreads in the December contract in which $35 strike puts, which are below the current share price, were bought 15,000 times while the lower $30 strike puts were sold. Should Caterpillar fumble and its stock falls to $30 and below by December options expiration, the trader would make the maximum profit of $3.92, Wilkinson said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.