Trade: Selling the September 40-42.5 Call Spread for $.70 credit
Risk: $180 per 1 lot
Reward: $70 per 1 lot
UPDATE 9.11.2012 This Spread is pretty much worthless, but I am letting it expire that way instead of wasting commissions.
Average Magnitude of Post Earnings Return 4.4%
NearTerm Straddle Indication:
Term Strike NBBO Size %Spot(Mid)
09/22 $37.5 $3.25 – $3.55 171 x 394 8.8%
09/22 $40 $3.10 – $3.35 60 x 99 8.3%
The Hang Seng underperformed today labeling itself as the worst performer in Asia as shares dropped
to their lowest in 3 weeks, losing 1.1%. Belle international, a Chinese footwear retailer was among those
dragging down the index, losing 4.6%, its worst in 7 months as the CEO said he expects pressure from
discounts of rival firms as they reduce inventory. Li Ning shed 4.3% ahead of earnings today, down 28%
this year. Oil giant CNOOC is down again today showing a 1.7% loss.
The FTSEurofirst is currently down .7% led by cyclical stocks and weak data from Japan exports. Miners
are down 1.7% hurt by poor results from global player BHP, who projects a 35% fall in second half
profits. Other cyclical stocks; autos and construction, fell 1% and 1.2% respectively. Banks are also down
0.6% today. Around Europe the Dax is -.72%, the CAC -.61% and the Madrid General -.83%.
MBA applications show worse this week down 7.4%.
Amazon launched the India Kindle store on its website, with over 1M titles offered in rupees.
In commodities crude is beginning down today while gold, silver and natural gas are looking to have big
gains.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu
I continue to watch the Brent-WTI Spread. Today the spread was at -$21.72 on a widening trend. I am bullish on this spread and think that it will close. Of course I would set a conservative stop to mitigate Middle Eastern risk.
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng ended flat today as gains were offsets by a loss from oil giant CNOOC, whose first half
profit fell double what the market expected. Food and Beverage corp Tingyi, jumped six percent, its best
day in almost 10 months, with a better than expected first half profit. Deutsche Bank upgraded the stock
to buy from hold and increase their target price 16%. China Resources Power slipped 0.7% today after a
near 2 year closing high yesterday due to first half results. They are up almost 14% so far this year.
The FTSEurofirst is currently up .5% after losing .5% yesterday, redeeming itself to even currently this
week. Hopes are coming from Greek Prime minister meeting with the German Chancellor, French
President and the Eurogroup Chief to try to secure more funding from the EU and ECB. For second
quarter earnings nearly 90% of European companies have now reported with 51% missing expectations
as year on year Q2 growth has contracted 11.2% according to Thomson Reuters data. Around Europe
the Dax, CAC and Madrid General are up 0.4%, 0.6% and 0.5% respectively.
Nike intends on raising shoe prices due to rising labor and material costs coming out of China.
Citigroup issues credits card in China without the help of co-branding with a domestic financial institute
becoming the first western bank to do so looking to exploit the ease of regulations in the country.
Commodities are looking strong today with crude, gold, natural gas and silver all set to begin above.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu
