Paper bought 6000 SE June 31 Calls for $.55 (3.1 times usual volume) when stock was trading $30.16
Paper bought 300 UEPS April 7 Calls for $.55 (9.0 times usual volume) when stock was trading $7.12
Paper bought 500 DSX May 11 Calls for $.30 (5.6 times usual volume) when stock was trading $10.31
Paper bought 370 TMV May 61 Calls for $1.35 (2.2 times usual volume) when stock was trading $56.02
Paper bought 239 GKK Aug 5 Calls for $.40 (3.2 times usual volume) when stock was trading $4.86
Paper bought 19,500 NYT Oct 10 calls for $1.0 (38.2 times usual volume) when stock was trading $9.82
Paper bought 6000 SE June 31 Calls for $.55 (3.1 times usual volume) when stock was trading $30.16
Paper bought 10,000 LXK Jan 2014 30 Calls for $1.65 (13.6 times usual volume) when stock was trading $26.19
Paper sold 10,000 HNZ Sep 75 Calls for $.10 (5.2 times usual volume) when stock was trading $72.07
Paper bought 3000 PLCM Oct 12.5 Calls and Sold Oct 10 Puts for $.05 credit (7.2 times usual volume) when stock was trading $10.85
Additionally, the BOJ has been perusing historic measures to try lift Japan out of its two decade long slump, via very creative quantitative easing. Kuroda told the press that the BOJ will discuss purchasing even more bonds, and potentially with more duration. According to sources, the BOJ currently buys assets through its 76 trillion-yen asset-purchase program. This translates into over $800 billion USD.
Many skeptics, like Kyle Bass of Hayman Capital, are rather nervous of the measures being perused by the BOJ. Mr. Bass, who made $500 million betting against subprime mortgages, points out that Japan is more levered than Greece, among many other astute observations.
The BOJ’s aggressive measures are definitely worth watching, especially as they translate into market action.
The Volatility Index’s 200 day moving average is 15.94, its 100 day average is 15.01. Its 50 day average dropped significantly to 13.50 with an even lower 20 day average at 13.26. The VIX had been averaging 25.8 from 2008 to 2012, but has now been trading at its lowest levels in six years thanks to a bullish market (even after fears surrounding Cyprus). VIX values greater than 30 are associated with large amounts of investor fear and uncertainty, while values below 20 represent a complacent market.
VIX options are used to hedge against market declines because its value generally increases as stocks decline. The Volatility Index can move sharply, increasing or decreasing significantly in a short amount of time. VIX call volumes have been setting records of late. March 19th set the single-day volume record totaling 1,392,621 contracts. Three weeks earlier the record had been set at 1,388,634. There is a great deal of speculation but no definite answers surrounding the new interest in VIX. Still VIX options are rarely exercised. In 2012 95% of VIX options expired worthless and that trend has continued through March of this year.
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Edmund Gray
KOTM Contributor
Edmund.Gray@gmail.com
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.
This March Alaska’s Senate passed legislation to cut taxes on oil production. The bill is expected to pass and be signed by their Governor Sean Parnell. ConocoPhillip is Alaska’s largest oil and gas producer and will be the biggest beneficiary when the bill passes. ConocoPhillips is expected to expand its exploratory drilling in arctic Alaska next year. ConocoPhillips is investing $2.5 billion in Alaska over the next five years on innovative technologies with the aim of reversing its declining production there.
My Trade: Buying the COP May 62.5 Calls for $.52
Risk: $52 per 1 lot
Reward: Unlimited
Breakeven: $63.02
Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short
—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com