Stocks on the move
Real-time Equity news
U.S. stock market report
1730 ET 05Oct2009-US STOCKS
Wall St rises on services data, earnings optimism
U.S stocks bounced back from a four-day losing streak on Monday, as optimism about upcoming earnings gathered steam and data showed the economy's critical services sector expanded for the first time since August 2008.
Financial stocks rallied, and were the top positive on the S&P 500 index, after Goldman Sachs upgraded the large-cap bank sector. It said share prices for companies in the industry didn't reflect their earnings power. For details, see. Wells Fargo & Co gained 6.9 percent.
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Reuters Messaging rm://caroline.valetkevitch.reuters.com@reuters.net
1629 ET 05Oct2009-Bulls see CSX recovery on track
analyst
U.S. railroad CSX Corp shares rose 2.28 percent to $42.60 and in the options arena, optimists were drawn to the November contract. 'Bullishness was expressed through put selling as investors appear to expect CSX to continue to thrive through expiration in November,' said Interactive Brokers Group market analyst Andrew Wilkinson. He noticed about 7,300 puts were sold short at the Nov $40 strike for an average premium of $2.03 apiece. Traders selling the contracts retain the full credit as long as CSX shares stay above $40 through expiration. Investors shorting the puts pocket the $2.03 credit in exchange for bearing the risk that shares decline beneath $40. He said if the puts land in-the-money by expiration, traders short the puts will have shares of the stock put to them at a price of $40 apiece. Losses begin to accumulate if shares fall from the current price and breach the break-even point at $37.97.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1548 ET 05Oct2009
Fear gauge gets combination options trade
The drop in the CBOE Volatility Index may have inspired some players to position for further downside momentum in the fear gauge through December expiration, said Interactive Brokers Group options analyst Caitlin Duffy. Near the close, the VIX fell 6.35 percent to 26.86. Trading in the December contract suggests traders are expecting the VIX to head back down to 25, she said. A so-called risk reversal appeared to have been established at the Dec. 25 strike as VIX call options were sold short to finance the purchase of put options. About 5,000 calls were earlier sold for $4.70 each, and spread against the purchase of 5,000 puts for $1.20 per contract, she said. Additional call selling took place at the Dec. 30 strike where 5,000 lots were sold. In another leg of the trade, 5,000 calls were bought at the Dec 42.50 strike, suggesting a partial exit strategy should the VIX rally hard by expiration.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1523 ET 05Oct2009-PREVIEW
Improved revenue could boost U.S. Q3 earnings
If the stock market bulls are right, U.S. third-quarter corporate earnings could show revenue kicked into gear after some disappointing numbers last quarter, sustaining the rally.
As the reporting period approaches, analysts said economic growth in the quarter could lift companies' sales in contrast to the previous quarter, when revenue lagged bottom-line earnings.
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Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1421 ET 05Oct2009
Option players eye likely gains in Limited Brands
Call buyers are sizing up Limited Brands Inc, the operator of the Victoria's Secret lingerie chain and Bath & Body Works shops, said WhatsTrading.com option strategist Frederic Ruffy. Its shares rose 6.01 percent to $17.10 in afternoon trade and players are picking up the January 2010 calls at the $17.50 strike. The top trade was 706 contracts for a premium of $1.45 on the International Securities Exchange, which is an opening customer buyer, according to ISEE sentiment data. 'It's a buying spree,' as 4,953 call contracts traded in all with the majority hitting ask-side, he said. Implied volatility for the January $17.50 strike stood at 46.3 percent, up from about 44.9 percent late on Friday. Retailers, including Limited, report their September sale results on Thursday.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1342 ET 05Oct2009
Juniper attracts notable bullish option play
One investor appears to be confident on the prospects of Juniper Networks Inc by rolling out a previously established call position in the October contract to a higher strike in the January 2010 contract. Shares of the network equipment maker rose 2.05 percent to $26.38. The trader originally bought 5,000 calls at the Oct $24 strike for about $1.32 apiece back on Aug. 25, said Interactive Brokers Group market analyst Andrew Wilkinson. In order to remain bullish on the stock the investor initiated a calendar spread to roll the long call position to a higher strike price. The sale of the original position yielded a premium of $2.55 apiece with an average net profit of $1.23 per contract. Next, Wilkinson said the trader rolled the bullish stance forward to the Jan $26 strike and paid $2.75 for each of the 5,000 calls. The investor is maintaining a bullish position but is also taking some profits by moving the position to a higher strike in the January contract, said options trader Steve Smith.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2009. 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.
Real-time Equity news
U.S. stock market report
1730 ET 05Oct2009-US STOCKS
Wall St rises on services data, earnings optimism
U.S stocks bounced back from a four-day losing streak on Monday, as optimism about upcoming earnings gathered steam and data showed the economy's critical services sector expanded for the first time since August 2008.
Financial stocks rallied, and were the top positive on the S&P 500 index, after Goldman Sachs upgraded the large-cap bank sector. It said share prices for companies in the industry didn't reflect their earnings power. For details, see. Wells Fargo & Co gained 6.9 percent.
For more please double click
Reuters Messaging rm://caroline.valetkevitch.reuters.com@reuters.net
1629 ET 05Oct2009-Bulls see CSX recovery on track
analyst
U.S. railroad CSX Corp shares rose 2.28 percent to $42.60 and in the options arena, optimists were drawn to the November contract. 'Bullishness was expressed through put selling as investors appear to expect CSX to continue to thrive through expiration in November,' said Interactive Brokers Group market analyst Andrew Wilkinson. He noticed about 7,300 puts were sold short at the Nov $40 strike for an average premium of $2.03 apiece. Traders selling the contracts retain the full credit as long as CSX shares stay above $40 through expiration. Investors shorting the puts pocket the $2.03 credit in exchange for bearing the risk that shares decline beneath $40. He said if the puts land in-the-money by expiration, traders short the puts will have shares of the stock put to them at a price of $40 apiece. Losses begin to accumulate if shares fall from the current price and breach the break-even point at $37.97.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1548 ET 05Oct2009
Fear gauge gets combination options trade
The drop in the CBOE Volatility Index may have inspired some players to position for further downside momentum in the fear gauge through December expiration, said Interactive Brokers Group options analyst Caitlin Duffy. Near the close, the VIX fell 6.35 percent to 26.86. Trading in the December contract suggests traders are expecting the VIX to head back down to 25, she said. A so-called risk reversal appeared to have been established at the Dec. 25 strike as VIX call options were sold short to finance the purchase of put options. About 5,000 calls were earlier sold for $4.70 each, and spread against the purchase of 5,000 puts for $1.20 per contract, she said. Additional call selling took place at the Dec. 30 strike where 5,000 lots were sold. In another leg of the trade, 5,000 calls were bought at the Dec 42.50 strike, suggesting a partial exit strategy should the VIX rally hard by expiration.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1523 ET 05Oct2009-PREVIEW
Improved revenue could boost U.S. Q3 earnings
If the stock market bulls are right, U.S. third-quarter corporate earnings could show revenue kicked into gear after some disappointing numbers last quarter, sustaining the rally.
As the reporting period approaches, analysts said economic growth in the quarter could lift companies' sales in contrast to the previous quarter, when revenue lagged bottom-line earnings.
For more please double click
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1421 ET 05Oct2009
Option players eye likely gains in Limited Brands
Call buyers are sizing up Limited Brands Inc, the operator of the Victoria's Secret lingerie chain and Bath & Body Works shops, said WhatsTrading.com option strategist Frederic Ruffy. Its shares rose 6.01 percent to $17.10 in afternoon trade and players are picking up the January 2010 calls at the $17.50 strike. The top trade was 706 contracts for a premium of $1.45 on the International Securities Exchange, which is an opening customer buyer, according to ISEE sentiment data. 'It's a buying spree,' as 4,953 call contracts traded in all with the majority hitting ask-side, he said. Implied volatility for the January $17.50 strike stood at 46.3 percent, up from about 44.9 percent late on Friday. Retailers, including Limited, report their September sale results on Thursday.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1342 ET 05Oct2009
Juniper attracts notable bullish option play
One investor appears to be confident on the prospects of Juniper Networks Inc by rolling out a previously established call position in the October contract to a higher strike in the January 2010 contract. Shares of the network equipment maker rose 2.05 percent to $26.38. The trader originally bought 5,000 calls at the Oct $24 strike for about $1.32 apiece back on Aug. 25, said Interactive Brokers Group market analyst Andrew Wilkinson. In order to remain bullish on the stock the investor initiated a calendar spread to roll the long call position to a higher strike price. The sale of the original position yielded a premium of $2.55 apiece with an average net profit of $1.23 per contract. Next, Wilkinson said the trader rolled the bullish stance forward to the Jan $26 strike and paid $2.75 for each of the 5,000 calls. The investor is maintaining a bullish position but is also taking some profits by moving the position to a higher strike in the January contract, said options trader Steve Smith.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2009. 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.