Best Buy (BBY) is scheduled to unveil its fourth-quarter results Thursday morning, with analysts anticipating a profit of $1.85 per share -- little changed from the big box retailer's year-ago earnings of $1.82 per share. Best Buy has been hot-and-cold on the earnings front; during the past four quarters, the company has topped consensus bottom-line estimates twice, and fallen short on two other occasions.

Ahead of the quarterly report, one options player built a bullishly biased spread on BBY. Right after the opening bell Wednesday morning, the trader purchased 358 April 32 calls, and simultaneously sold 716 April 35 calls. In other words, two April 35 calls were sold for every one purchased April 32 call. This strategy is known as a ratio call spread, and it's typically used by traders who are bullish on the underlying equity -- but with a very specific upside target in mind.

Continue reading Best Buy Singled Out for a Ratio Call Spread Ahead of Earnings

Best Buy Singled Out for a Ratio Call Spread Ahead of Earnings originally appeared on BloggingStocks on Wed, 23 Mar 2011 19:20:00 EST. Please see our terms for use of feeds.

Option volume has ramped up today on KeyCorp (KEY), with activity rising well beyond the usual level on both the call and put side of the tape. Taking a closer look at some of the major block trades on this regional banking issue, it appears that a single spread strategist is responsible for a healthy portion of this option volume.

Specifically, the trader purchased a block of 10,000 June 10 calls for $0.50 each, and simultaneously sold 10,000 June 8 puts for $0.25 each. The result was a net debit of $0.25 per pair of contracts -- which means the speculator can begin collecting profits on those purchased calls if KEY rallies beyond $10.25 by June expiration.

Continue reading Buyout Buzz Inspires Bullish KeyCorp Spread

Buyout Buzz Inspires Bullish KeyCorp Spread originally appeared on BloggingStocks on Thu, 03 Mar 2011 17:00:00 EST. Please see our terms for use of feeds.

Shares of Patriot Coal (PCX) surged to a new annual high of $27.54 right out of the gate Tuesday, as traders cheered the energy issue's latest quarterly report.

Patriot announced that its fourth-quarter net profit dwindled 33% to $7.3 million, or 8 cents per share, from its year-ago results of $10.9 million, or 12 cents per share. Revenue for the quarter climbed 5% to $528.2 million, but selling and administrative expenses swelled 35% to $14 million. Likewise, Patriot's operating cost per ton increased 9.5% to $55.70.

Continue reading Patriot Coal Climbs Higher Despite Q4 Revenue Miss

Patriot Coal Climbs Higher Despite Q4 Revenue Miss originally appeared on BloggingStocks on Tue, 01 Feb 2011 11:30:00 EST. Please see our terms for use of feeds.

In the wake of Friday's drastic pullback in the stock market, it looks like at least one trader is banking on more short-term volatility. Bright and early Monday, a spread speculator constructed a long straddle on the PowerShares QQQ Trust (QQQQ), with the trader hoping to capitalize on a substantial price swing over the next several weeks.

Specifically, the trader purchased a block of 1,205 February 56 calls, and simultaneously bought a matching block of 1,205 February 56 puts. QQQQ was hovering right at $55.69 at the time of these transactions, placing both strikes very near the money.

Continue reading Straddle Player Bets on Big Volatility for PowerShares QQQ Trust

Straddle Player Bets on Big Volatility for PowerShares QQQ Trust originally appeared on BloggingStocks on Mon, 31 Jan 2011 10:30:00 EST. Please see our terms for use of feeds.

Continue reading Dissecting a Long-Term Bullish Bet on Lowe's Companies

Dissecting a Long-Term Bullish Bet on Lowe's Companies originally appeared on BloggingStocks on Thu, 27 Jan 2011 11:30:00 EST. Please see our terms for use of feeds.

Continue reading State Street Takes a Hit After Q4 Report

State Street Takes a Hit After Q4 Report originally appeared on BloggingStocks on Wed, 19 Jan 2011 14:30:00 EST. Please see our terms for use of feeds.

Friday morning, the good folks at JPMorgan Chase (JPM) kicked off a wave of quarterly reports from the banking sector. Next week, we'll hear the latest earnings results from the likes of Citigroup (C), Goldman Sachs (GS), and Wells Fargo (WFC), just to name a few.

Of course, the biggest bank in the nation -- Bank of America (BAC) -- also has a quarterly report on deck. Ahead of next Friday's fourth-quarter release, one speculator opted to construct a high-volatility options strategy on BAC.

Continue reading Bank of America Singled Out for a Long Strangle Ahead of Earnings

Bank of America Singled Out for a Long Strangle Ahead of Earnings originally appeared on BloggingStocks on Fri, 14 Jan 2011 12:30:00 EST. Please see our terms for use of feeds.

The shares of Nvidia (NVDA) have been tearing up the charts in 2011, thanks to a lucrative settlement with Intel (INTC) and a high-profile new partnership with ARM Holdings (ARMH). The month of January isn't quite half-over yet, but the stock is already sitting on a year-to-date gain of 51.6%.

Judging by at least one headline hitting the wires, the stock's rapid rise is making some analysts nervous. However, on Wednesday, one upbeat options trader placed a bet on additional upside from NVDA during the near term.

Continue reading Spread Speculator Bets on Additional Upside for Nvidia

Spread Speculator Bets on Additional Upside for Nvidia originally appeared on BloggingStocks on Thu, 13 Jan 2011 12:30:00 EST. Please see our terms for use of feeds.

KB Home (KBH) is ending the week on a high note, after the homebuilder comfortably surpassed Wall Street's fiscal fourth-quarter earnings expectations. Bright and early Friday morning, KBH announced quarterly net income of $17.4 million, or 23 cents per share, on revenue of $451 million. Adjusted housing gross margins improved to 19.7% from 19%.

This marks KBH's first quarterly profit, without the aid of tax gains, in almost four years. Analysts were anticipating KBH to swallow a deficit of 17 cents per share on revenue of $441.3 million, so these results definitely qualify as a positive surprise.

Continue reading KB Home Rallies After Solid Q4 Report

KB Home Rallies After Solid Q4 Report originally appeared on BloggingStocks on Fri, 07 Jan 2011 12:00:00 EST. Please see our terms for use of feeds.

A parade of retailers have stepped up Thursday morning to unveil their December sales results, including The Gap Inc. (GPS). The jeans giant confessed to an unexpected 3% decline in same-store sales for the month, falling well short of analysts' expectations for an increase of 2.6%.

Gap North America was hit hardest, with same-store sales tumbling 8% for the month. The only business segment to record a gain for December was Banana Republic North America, as same-store sales improved 1%.

Continue reading The Gap Plunges on Lackluster December Sales

The Gap Plunges on Lackluster December Sales originally appeared on BloggingStocks on Thu, 06 Jan 2011 12:20:00 EST. Please see our terms for use of feeds.

Las Vegas Sands (LVS) gapped higher out of the gate Monday morning, as traders cheered the latest round of data from Macau. Casino revenues in the popular gambling destination rose 58% in 2010 to a record 188.34 billion patacas, or roughly $23.51 billion, according to the Macau Gaming Inspection and Coordination Bureau.

Revenue for the month of December ballooned 66.4% to an all-time monthly high of 18.883 billion patacas, or approximately $2.36 billion.

Continue reading Las Vegas Sands Catches a Lift from Rising Macau Revenues

Las Vegas Sands Catches a Lift from Rising Macau Revenues originally appeared on BloggingStocks on Mon, 03 Jan 2011 12:30:00 EST. Please see our terms for use of feeds.

Shares of Anadarko Petroleum (APC) gapped higher right out of the gate Thursday morning, thanks to a report that BHP Billiton (BHP) may be eyeing the firm as a potential takeover target. According to the U.K.'s Daily Mail, BHP could be prepping an offer worth $90 per share to acquire Anadarko. However, neither company has issued a formal response to the speculation.

After jumping to a new annual high of $76.50 bright and early Thursday morning, APC is on pace to notch a weekly finish atop the $70 level for the first time since April 23. In fact, if the shares can maintain their positive momentum through Friday's close, the shares could stage their first weekly victory north of $75 since June 2008.

Continue reading Anadarko Petroleum Bounces Higher on Buyout Buzz

Anadarko Petroleum Bounces Higher on Buyout Buzz originally appeared on BloggingStocks on Thu, 30 Dec 2010 11:00:00 EST. Please see our terms for use of feeds.

Call volume is unusually heavy on Advanced Micro Devices (AMD) today, with nearly 8,300 contracts changing hands during the first hour of the session -- easily outpacing the stock's average daily call activity of 6,774 contracts. However, the day's option volume isn't necessarily bullish in nature.

Nearly all of today's volume has taken place at AMD's January 2012 7.50 call, where a block of 8,000 contracts traded at the bid price -- suggesting they were most likely sold. This block appears to have been tied to a corresponding stock trade, which means we're likely seeing the initiation of a buy-write position.

Continue reading Advanced Micro Devices Hit with Heavy Call Volume

Advanced Micro Devices Hit with Heavy Call Volume originally appeared on BloggingStocks on Wed, 29 Dec 2010 14:00:00 EST. Please see our terms for use of feeds.

Options players rushed to place their bets on The Gap (GPS) Tuesday, with volume rising to five times the norm within the first hour of trading. Taking a closer look at the major block trades, it looks as though one speculator is anticipating a major price swing from GPS during the next year.

Specifically, the trader opened a long strangle on GPS by purchasing 2,619 January 2012 20-strike calls, and simultaneously buying 2,619 January 2012 17.50 puts. This two-legged option strategy allows the trader to benefit from a drastic move in the underlying equity, regardless of whether the shares move higher or lower.

Continue reading The Gap Singled Out for a Long-Term Strangle

The Gap Singled Out for a Long-Term Strangle originally appeared on BloggingStocks on Tue, 28 Dec 2010 12:30:00 EST. Please see our terms for use of feeds.

Shares of Netflix (NFLX) started Tuesday on a high note, with the shares gaining more than 1% out of the gate. Traders appear to be responding to new comments from Jim Cramer, after the host of CNBC's Mad Money offered an upbeat opinion on the stock Monday.

Specifically, Cramer is enthusiastic about Netflix's push into streaming content, and he has high expectations for future subscriber growth. The analyst also argued that the stock's valuation is actually quite reasonable, when measured against the company's long-term growth rate. For traders looking to take part in continued gains by NFLX, Cramer suggested in-the-money call options.

Continue reading Netflix Gains Ground on Cramer Recommendation

Netflix Gains Ground on Cramer Recommendation originally appeared on BloggingStocks on Tue, 21 Dec 2010 13:00:00 EST. Please see our terms for use of feeds.

Call options were in heavy rotation Monday on The Gap (GPS). Within the first hour of trading, 3,350 of these bullishly oriented options crossed the tape -- about four times the expected number of call contracts. The bulk of this activity took place at The Gap's January 2011 22.50 call, where 3,031 contracts were traded. Approximately 77% of these calls changed hands at the ask price, indicating they were purchased.

However, this skew toward calls simply continues a recent trend for GPS. During the past 10 days, speculators on the International Securities Exchange (ISE) have bought to open 5.99 calls for every put on the retailer. This ratio ranks above 75% of other such readings taken during the previous year, indicating that traders on the ISE have purchased calls over puts at a faster pace just 25% of the time.

Continue reading Call Players Place Their Bets on The Gap

Call Players Place Their Bets on The Gap originally appeared on BloggingStocks on Mon, 20 Dec 2010 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Call Volume Soars Ahead of Earnings from H&R Block

Call Volume Soars Ahead of Earnings from H&R Block originally appeared on BloggingStocks on Tue, 07 Dec 2010 13:30:00 EST. Please see our terms for use of feeds.

Bank of America (BAC) has grabbed some headlines lately, for better or worse. Earlier this week, WikiLeaks founder Julian Assange claimed he would release documents next year pointing to an "ecosystem of corruption" at a major U.S. bank, and many journalists connected a trail of dots leading back to Bank of America. As a result, the stock slipped 3% on Tuesday.

However, Bank of America bounced back with the rest of the market on Wednesday, after one executive at the Charlotte-based bank downplayed the growing speculation. During the course of the session, call volume on BAC rose to two times the usual level, with about 593,000 contracts crossing the tape.

Continue reading Dissecting a Massive Call Spread on Bank of America

Dissecting a Massive Call Spread on Bank of America originally appeared on BloggingStocks on Thu, 02 Dec 2010 12:00:00 EST. Please see our terms for use of feeds.

Continue reading Option Volume Revs Up on General Motors

Option Volume Revs Up on General Motors originally appeared on BloggingStocks on Mon, 29 Nov 2010 13:15:00 EST. Please see our terms for use of feeds.

Late Wednesday, DryShips (DRYS) reported that its third-quarter profit climbed 57% to $49.3 million, or 18 cents per share, while revenue increased 1.5% to $225.5 million.

On an adjusted basis, earnings for the quarter arrived at 38 cents per share. Operating margin improved to 48% from 40.4%. The results surpassed analysts' expectations, which called for a profit of 25 cents per share on $217 million in revenue.

Continue reading DryShips Sails Higher on Solid Q3 Report

DryShips Sails Higher on Solid Q3 Report originally appeared on BloggingStocks on Thu, 18 Nov 2010 12:00:00 EST. Please see our terms for use of feeds.