Author: Andrew Keene
Biggest Bearish Activity 2.19.2013
Paper bought 1070 PVR March 25 Puts for $.45 (6.4 times usual volume) when stock was trading $25.75
Paper bought 5200 FST May 6 Puts for $.65 (2.1 times usual volume) when stock was trading $6.34
Paper bought 800 LINTA March 21 Puts for $.40 (29.5 times usual volume) when stock was trading $21.59
Paper bought 900 ARLP June 50 Puts for $1.05 (23.1 times usual volume) when stock was trading $62.46
Paper bought 2145 AVID March 7.5 Puts for $.30 (29.4 times usual volume) when stock was trading $7.99
Biggest Bullish Activity 2.19.2013
Paper bought 1200 AMKR March 5 Calls for $.15 (3.0 times usual volume) when stock was trading $4.79
Paper bought 2880 June 2.5 Calls for $1.85 (22.2 times usual volume) when stock was trading $4.22
Paper bought 1200 FCS March 16 Calls for $.25 (4.1 times usual volume) stock was trading $15.51
Paper bought 4500 KKR Jan 2014 17 Calls for $2.33 when stock was trading $17.91
Paper bought 1978 APO March 22.5 Calls for $1 (8.9 times usual volume) when stock was trading $22.78
Unusual Options Activity Report 2.19.2013
Paper bought 20,000-40,000 TSO April 55-65 Call Spread for $2.30 1×2
Call Spreads (8.5 times usual volume) when stock was trading $55.09
Paper bought 20,000 HNZ June 75 Calls for $.10 (15.2 times usual volume) when stock was trading $72.13
Paper bought 39,800 CBS June 50 Calls for $.85 (3.9 times usual volume) when stock was trading $44.76
Paper sold 2800 GPS April 32 Puts for $1.17 when stock was trading $32.20
Paper bought 106,080 BX Jan 2015 30 Calls for $.43 (9.4 times usual volume) when stock was trading $19.32
S&P Emini Pivot points for 2.20.2013
Rhetoric Aside, Where Does HLF Really Go From Here? 2.19.2013
Investors continue to ask the question… where does Herbalife go from here?
Well, Icahn believes the answer to that question is up. In his most recent appearance on CNBC, Carl said, “I buy things I think are undervalued.” From this statement it’s clear that he’s banking on making money from being long HLF.
I know quite a few investors will take his word and get long HLF as well…but do the charts line up with Icahn’s current view? Lets check it out…
Going back to the lows made in early 2009, it looks like a clear five waves completed in April 2012 at $73. Since that high, there as been a strong reversal, but it was done so in a corrective fashion (three waves). This tells me one of two things… one being that we are going to see a strong reversal right here ($38-$44), to bring us down in a fifth wave completing near the $10-$15 region. The second being that we have bottomed at $24, and will now begin a stronger third wave up that could take a couple years to complete.
When looking at both of these possibilities, the most probable scenario that I see playing out is a third wave up. The MACD is portraying some nice positive divergence, and gives me more confidence that we will see higher levels before we see lower. My initial targets are the $55-$63 region for (iii) of 3 before we see a stronger consolidation in (iv) of 3. By year-end I could even see wave 3 ending up near $72-$80!
When putting counts on a stock, you always need to have stops that invalidate your current position. If the price action falls below the $30.73 that would be my first indication that we are in a fifth wave down, with $23.91 being the nail in the coffin for the bulls. Bulls do not want to see it below that level!!
In the long I am optimistic on Herbalife, and have to say that Carl Icahn might have snagged up a ‘diamond in the rough.’
Author: Peter Nitso
pnitso@yahoo.com
Twitter: @PeterNitso
Andrew Keene on First Business Talking the Yen, HLF, WMT, & the HNZ Situation 2.19.2013
S&P Emini Pivot points for 2.19.2013
Apple & Google Pivot Points for 2.19.2013
A Word From President/Founder Andrew Keene On Recent Unusual Options Activity 2.15.2013
Also, if this trader knew a deal was going to happen, why buy the June options, if a deal is done, he could have made more money if he traded the Feb or March Options instead. These were the 4 biggest orders across all exchanges in the last 10 days before the deal. As you can see the March 60 puts were bought for $.725. This is the kind of trade you could see if a trader had inside information. A trader will buy puts and buy stock in order to avoid being flagged by the SEC. This has happened many times in the last 6 months in STZ and JOSB where a trader bought puts, yes puts not calls and the stock continued to rally to the upside. The trader that bought calls ahead of this announcement is one of two things, naive or lucky. In the LIVE Trading Room http://bit.ly/108XTgh I go over and analyze these trades, because these are the types of trades that I saw from the trading floor for over 10 years. So, was there unusual options activity, yes the days that the June 65 Calls were bought it was around 4.5 times usual volume, but it was not necessarily a terribly out of the ordinary event. So is it likely that the trader that bought the calls had inside information? I think not. I think that the trader that bought the Puts might have known something, but as I watch 2,000 plus trades a day, these trades are all based on some information, knowledge, or ideas that the public might or might not know. It is easy for those in the media to find a trade that could be considered suspicious ahead of a big announcement or deal. Very similar to holding on the NFL, it could be called every play, but then again you can always find a statistic on a statistic. So, I will continue to trade and make money trading from the Whales, because yes they do know more. For more information about interviews on phone and radio about this topic, please email me: andrew@keeneonthemarket.com or call at 312-576-3210.
(From Trade Alert)
1000 HNZ Mar13 60.0 Puts $0.75 ASK CBOE 13:53:55 IV=11.7% +0.8 PHLX 592 x $0.65 – $0.75 x 97 ARCA Vega=$7590 HNZ=60.83 2/7 Thu
750 HNZ Mar13 60.0 Puts $0.70 ASK PHLX 09:56:13IV=12.0% +1.1 PHLX 470 x $0.60 – $0.70 x 808 PHLX Vega=$5699 HNZ=61.01 2/7 Thu
422 HNZ Jun13 65.0 Calls $0.35 ASK CBOE 13:58:12IV=12.7% +1.2 ARCA 29 x $0.25 – $0.35 x 448 AMEX OPENING Vega=$3642 HNZ=60.80 2/13 Wed
278 HNZ Mar13 60.0 Puts $0.75 BID BOX 10:07:43IV=11.3% +0.5 BOX 278 x $0.75 – $0.80 x 308 CBOE Vega=$2153 HNZ=60.79 2/5 Tue
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Andrew Keene
President/Founder KeeneOnTheMarket.com
Andrew@KeeneOnTheMarket.com
312-576-3210