Unusual Options Activity Report 4.4.2013

Chart Options Backspread LadderPaper bought 2000 HUN May 19 Calls for $.80 (4.7 times usual volume) when stock was trading $18.23
Paper bought 5000 TLT Weekly 119 Calls for $.91 when stock was trading $119.57
Paper bought 2000 WFC 4.12.2013 Weekly 37 Calls for $.50 (when stock was trading $36.93
Paper bought 18,000 PCS June 12-14 Call Spread for $.41 (2.6 times usual volume) when stock was trading $11.12
Paper bought 1575 MBI May 13 Calls for $.40 when stock was trading $10.19

A Reason to be Bearish: $CAT ($SPY, $QQQ) 4.1.2013

From the technical prospective, CAT shares are below the 200, 150, 100, and 50 day moving averages. The copper market is also below these moving averages, echoing the bearish technical set-up.

In recent news, Susquehanna analyst Ted Grace lowered his 2013 EPS estimates from $8.00 to &7.45. And just today the ISM index fell to worse-than-forecasted levels…both not helping the CAT bulls in the short term.


Author
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A Reason to Be Bearish

Options Trading

Learn Options Trading

KeeneOnTheMarket offers several ways to learn options trading. One way to learn options trading is to sign up for our Live Trading Room and follow trading veteran Andrew Keene.

Another way to learn is to subscribe to our premium twitter feed. It tweets Andrew Keene’s options trading throughout the day.

Another way to learn options trading is to get one-on-one mentoring from KeeneOnTheMarket’s expert staff. 

Trade Online

Learn to Trade Online

One of the best ways to learn to trade onilne is to sign up for KeeneOnTheMarket’s Live Trading Room. Follow  veteran trader Andrew Keene as he trades online all throughout the day. Get all your questions answered by an expert options trader.

Another option to learn how to trade online, is to sign up for our premium twitter feed to follow Andrew Keene’s trades throughout the day.

If that’s not enough, there’s two other ways to learn to trade online: a one-on-one training program or an online trading bootcamp offered by KeeneOnThe Market.

 

How to Trade

Learn How to Trade:

One of the best ways to learn how to trade options is to use KeeneOnTheMarket’s Live Trading Room. Andrew Keene has over 10 years experience trading options on the Chicago Board Options Exchange. By subscribing to the Live Trading Room you’ll have 100% access to Keene’s trades thoughout the day.

Or you can learn how to trade options with Andrew Keene one on one. Get the mentoring you need to be a successful options trader from an 11 year trading veteran. Also are available are two and five day bootcamps from KeeneOnTheMarket. Another way to learn to trade options is to follow KeeneOnTheMarket’s permium twitter feed where you can track Keene’s trades thoughout the day.

What are Options?

What are Options: Definition

An option is simply a contract that guarantees the right to buy or sell an underlying asset at a specific price before a certain date. An option is another type of security, like a stock or bond. The price the option guarantees its owner is called the strike price. An options contract generally represents 100 underlying shares. The income earned by the seller of an option contract is called the premium.

What are Options: Calls and Puts

There are two types of options: calls and puts. A call gives its owner the right to buy an asset at a certain price before a certain date. A call holder hopes the stock price will increase before the option expires. A put gives its owner the right to sell an asset at a certain price before a certain date. A put holder hopes the stock price will decrease before the option expires.

What are Options: Example

Someone buys an options contract to buy 100 shares of stocks for $80 dollars for $200. The contract expires in 180 days. If the stock price grew to $85 dollars before the 180 days, the options holder would have the right to buy the 100 shares at $80 strike price, essentially saving $500 while paying the option’s seller the $200 premium.

UA Fundamentals (UA, SPY) 3.15.2013

Under Armour has made many inroads into different sectors of the retailing market. As mentioned before, these include the shoe, casual, and female market for example. A risk to these efforts is if these investments don’t pay off, or the consumer rejects their products. It is interesting to note too that the stock has over 17% short interest. This may indicate that some of Wall Street believes UA is overvalued and does not present great prospects as it once did before from a risk reward prospective.

The front month options imply a $4.4 range up or down by expiration in just over 30 days. This is about an 8% move up or down.


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UA Fundamentals

A Million Dollar Profit in GMCR in less than a Week 3.11.2013

Sometimes, I miss trades, because I am at a meeting, on the phone or
away from my desk.  Every Morning when I
wake up the first thing I do is turn on CNBC.  I watch to see the
stocks that are moving in  pre-market trading.  I saw GMCR has been on fire on
a possible short and squeeze.  So, then I went to my Unusual Options Activity
scanner and noticed a trader bought 5517 GMCR April 55 Calls for
$.96.  This was the biggest order over the last 10 trading days.  Let
me show a breakdown of how much money
this trader made.

 

Paper bought 5517 April 55 Calls for $.96
(Paper is an order from a hedge fund, mutual fund, retail bank, or BIG trader)

Risk: $96 per a lot
Reward: Unlimited
Breakeven: $55.96
Cash Outlay for this Trade: $529,632

 

Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short

On 3.11.2013, these Calls are worth $2.50, so lets breakdown this
trades Profits.

$2.50- $.96 * 100 * 5517=  $849,618

If a trader risked $1,000 on this trade and bought 11 Options they
would have netted $2,500  If a trader risked $5,000 on the trade and bought 55 Options, they
would netted $12,500

This is just another example of trading with the BIG money and Hedge
funds in the BEST Live Trading Room http://bit.ly/108XTgh as I
breakdown over 2,000 trades in a day and also tweet them on our

Premium Twitter feed http://bit.ly/WmtfI4

By the way, SEC leave those HNZ traders alone.

Unusual Option Activity Nets HUGE Profits 3.10.2013

Sometimes, I miss trades, because I am at a meeting, on the phone or away from my desk.  Every Morning when I
wake up the first thing I do is turn on CNBC.  I watch to see the
stocks that are moving in  pre-market trading.  I saw NAV jumping higher on
a variety of news.  So, then I went to my Unusual Options Activity
scanner and noticed a trader bought 12,000 NAV April 30 Calls for
$.65.  This was the biggest order over the last 10 trading days.  Let me show a breakdown of how much money
this trader made.

Paper bought 12,000 NAV April 30 Calls for $.65
(Paper is an order from a hedge fund, mutual fund, retail bank, or BIG trader)
Risk: $65 per a lot
Reward: Unlimited
Breakeven: $30.65
Cash Outlay for this Trade: $780,000

Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short

On 3.8.2013, these Calls are worth $6.15, so lets breakdown this trades Profits.

$6.15- $.65 * 100 * 12,000=  $6.6 Million Dollar

If a trader risked $1,000 on this trade and bought 15 Options they
would have netted $8,250

If a trader risked $5,000 on the trade and bought 75 Options, they
would netted $41,250

This is just another example of trading with the BIG money and Hedge
funds in the BEST Live Trading Room http://bit.ly/108XTgh as I
breakdown over 2,000 trades in a day and also tweet them on our
Premium Twitter feed http://bit.ly/WmtfI4

By the way, SEC leave those HNZ traders alone.


Andrew Keene
President/Founder
[email protected]
@KeeneOnMarket