Good morning from Chicago, I’m Alan Knuckman here at the CBOE with your Pre Market Pulse for Tuesday, September 9th.
Volatility reared its pretty head as the prime mover in the market as a new week began Monday. Price movement can mean opportunity in what has been a slow couple of weeks of stock melt up.
The VIX traded above $13, finishing at $12.66 up 4.75% on the day. As a weekly reminder, the VIX has remained significantly above record lows even with the S&P price continually made new highs.
On a light day, with only 60% normal VIX volume, a SIZE paper order (meaning real money institution or hedge fund) saw a buy of 15,000 of the October $18 calls at $.74 ask. The total on the day was 20,000 contracts with the expiration break even 48% above the closing VIX price.
Positive performance had the NDX Nasdaq 100 fight the downward pressure to close up .14% at 4095, ½ less than 10 points from the recent record last Wednesday. All eyes are on Apple today with shares closing at $98.36 for the fourth session below $100. AAPL options traded a less than robust 778,000 contracts, still number one in equity options, with 66% call volume.
YHOO for Ali Baba, as shares jumped over 5% to new 52-week highs closing at $41.81. At 4x normal option volume, YHOO traded a close second with 771,000 lots. More than 22,000 of the October $45 calls traded with a Bid and Ask mix. Yahoo is up over 16% in the last month, as the stake in the pending ALIBABA IPO comes into focus.
Pharma Mylan had nearly 8x normal option activity, closing at $47.96, up 2%. MYL had bull spread action in the January $49/$57.50 calls around $2.50. The March 4th price peak sits at $57.52, a level necessary to achieve max profit at expiry.
The Broad market S&P 500 SPX closed down .33% at 2001 ½, with a healthy range from 2007, only 4 points from the record peak, and the low at 1995. In the SPY S&P 500 SPDR, a 49,000 lot of the Nov $195 puts were sold at $2.69. With open interest of 87,000 contracts, the motivation is to be determined. This article offers free shipping on qualified products, or buy online and pick up in store today at Medical Department.
Blue Chips dropped 26 points to 17,111, making a .15% loss. The YTD score is up 3.14% for the dogged DOW, with a third of the components still red in 2014.
Former Dow component Bank of America jumped 2% to $16.35, trading 1.3 times normal option activity on an impressive 79% calls as the number 3 equity option of the day. BAC out of the money January $17 calls were in play early and often starting with a 20,000 lot buy at the Ask for $.57.
Stocks to watch this morning include:
Annie’s Organics is being bought by General Mills for $46 a share, with BNNY the good macaroni and cheese up 37% in the pre market.
Twitter added a buy button to all tweets, and it has worked, with the stock up .5% to $52.30 before the bell.
Burlington Stores, that old coat place, (not just old coats but that what they used to be known for was coats) is up 5% in the pre market on good earnings results and raising outlook.
Overseas markets have The Nikei in Japan up .25% to lead the day. Europe in going nowhere after action yesterday as the FTSE in London and the DAX in Germany are steady to unchanged.
Stock index futures prices are steady with the Emini S&P plus 1 point. The Dow futures are 10 points higher here this morning, with an hour to go before the open of the cash stock market.