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.

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.

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.

Continue reading Green Mountain Coffee's SEC Woes Inspire a Bearish Strangle

Green Mountain Coffee's SEC Woes Inspire a Bearish Strangle originally appeared on BloggingStocks on Wed, 29 Sep 2010 14:30:00 EST. Please see our terms for use of feeds.

Option volume was relatively quiet in Citigroup Inc. (C) on Tuesday, with call and put activity both falling short of the expected daily levels. However, a noteworthy volatility play crossed the tape around midday, with one long-term speculator betting on a significant price swing from the bailed-out bank.

Shortly after noon, a block of 10,000 March 2011 4-strike puts traded at the ask price, suggesting they were purchased, while a matching block of 10,000 March 2011 5-strike calls changed hands at the ask price. Open interest at both strikes swelled overnight by more than 10,000 contracts apiece, confirming these were all freshly opened positions.

Continue reading Citigroup Singled Out for a Long-Term Strangle

Citigroup Singled Out for a Long-Term Strangle originally appeared on BloggingStocks on Wed, 11 Aug 2010 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Options Player Strangles Valero Energy

Options Player Strangles Valero Energy originally appeared on BloggingStocks on Thu, 05 Aug 2010 13:40:00 EST. Please see our terms for use of feeds.

Continue reading Weyerhaeuser Strangled Ahead of Earnings

Weyerhaeuser Strangled Ahead of Earnings originally appeared on BloggingStocks on Thu, 22 Jul 2010 12:40:00 EST. Please see our terms for use of feeds.

If you've been watching the market at all during the past month, you probably know that "volatility" is the prevailing theme. With uncertainty on the rise among investors, one option strategist on Thursday initiated a directionally neutral bullish volatility spread on coal concern Peabody Energy (BTU).

Specifically, the trader bought to open a block of 5,000 July 41 calls, and simultaneously bought to open an equivalent number of July 38 puts. BTU was trading just shy of $40 at the time these transactions occurred, placing both options out of the money. In other words, this appears to be the initiation of a long strangle on the stock.

Continue reading Betting on Volatility with a Peabody Energy Strangle

Betting on Volatility with a Peabody Energy Strangle originally appeared on BloggingStocks on Fri, 11 Jun 2010 13:00:00 EST. Please see our terms for use of feeds.

United Airlines parent UAL Corp. (UAUA) was singled out for a directionally neutral spread strategy on Wednesday, with one options trader betting on near-term volatility for the airline issue. Shortly after the opening bell, a block of 325 contracts changed hands on UAUA's June 24 call for the ask price of $1.32, indicating they were purchased. Simultaneously, a matching block of 325 June 16 puts traded at the ask price of $0.50, revealing these contracts were also bought.

Continue reading Strangle Player Bets on a Big Move for UAL Corp.

Strangle Player Bets on a Big Move for UAL Corp. originally appeared on BloggingStocks on Thu, 15 Apr 2010 12:40:00 EST. Please see our terms for use of feeds.

Are shares of The Coca-Cola Company (KO) poised for a technical breakout? One options trader seems to think so -- during the course of Monday's trading, a long strangle was opened on the blue-chip soda stock. In this two-legged spread, the direction of the stock's move doesn't matter -- only its magnitude.

Specifically, a block of 422 April 52.50 puts traded at the ask price of $0.68 around midday Monday. Simultaneously, a matching block of 422 April 55 calls changed hands at the ask price of $0.46. Implied volatility rose with each transaction, and open interest at both strikes rose overnight, confirming that these were newly opened positions.

Continue reading Option Player Strangles Coca-Cola Company

Option Player Strangles Coca-Cola Company originally appeared on BloggingStocks on Tue, 16 Mar 2010 13:00:00 EST. Please see our terms for use of feeds.

Humble restaurant chain Buffalo Wild Wings (BWLD) is scheduled to release its fourth-quarter earnings report after the market closes on Thursday, Feb. 11. Ahead of the event, analysts surveyed by Thomson Reuters are looking for a profit of 51 cents per share, up from 43 cents per share in the year-ago quarter. BWLD has an impressive history in the earnings spotlight, having matched or exceeded Wall Street's consensus expectations in each of the previous four reporting periods.

Continue reading Ambitious Trader Strangles Buffalo Wild Wings Ahead of Earnings

Ambitious Trader Strangles Buffalo Wild Wings Ahead of Earnings originally appeared on BloggingStocks on Wed, 10 Feb 2010 18:30:00 EST. Please see our terms for use of feeds.

As Melly Alazraki noted earlier today, McDonald's Corp. (NYSE: MCD) is one of many heavy hitters to take the earnings stage today. Unfortunately, the fast-food firm didn't exactly impress with its latest quarterly figures; the company struggled under the weight of weak sales during the month of June, and saw its second-quarter profits slide 8% year-over-year as a result.

Specifically, the Big Mac parent raked in net income of $1.09 billion, or 98 cents per share, compared to its year-ago results of $1.19 billion, or $1.04 per share. Excluding a one-cent gain, earnings weighed in at 97 cents per share. McDonald's reported that strength in the U.S. dollar negatively impacted its quarterly results by about 9 cents per share.

Continue reading McDonald's disappoints strangle speculator with Q2 results

McDonald's disappoints strangle speculator with Q2 results originally appeared on BloggingStocks on Thu, 23 Jul 2009 11:20:00 EST. Please see our terms for use of feeds.