Home Depot (HD) trading at $78.60 near its fifty two week highs. Home Depot is up about 2.69% today on an earnings miss. Shares of Home Depot have been trading in a fifty two week range between $72.21-78.82. Home Depot is a hardware and home improvement retailer. The company blamed the earnings miss on the long winter and the cold weather. Home Depot is one of the very few companies that could legitimately use the long winter as an excuse for a disappointing quarter. Most of Home Depot’s business comes from the sale of outdoor items. Considering the harsh winter Home Depot only missed by .03 cents a share. Although revenue fell sales were on the rise for the retailer. With the summer somewhere in the near future, traders think HD could continue through to new fifty two week highs. Today we saw some bullish activity in HD with a trader buying 2720 August 85 Calls for $0.32 cents. Home Depot is currently trading below the Ichimoku cloud. The chart is showing neutral future trend and has been trading bearishly on the cloud over the past two months. Although there isn’t any extremely bullish signals, we will be keeping an eye on Home Depot for bullish activity and a break in the cloud to the upside.
Category: Blog
5.10.2013 Unusual Options Activity Recap
Apple & Google Pivot Points for 4.8.2013
Unusual Options Activity Report 4.4.2013
Paper bought 2000 HUN May 19 Calls for $.80 (4.7 times usual volume) when stock was trading $18.23
Paper bought 5000 TLT Weekly 119 Calls for $.91 when stock was trading $119.57
Paper bought 2000 WFC 4.12.2013 Weekly 37 Calls for $.50 (when stock was trading $36.93
Paper bought 18,000 PCS June 12-14 Call Spread for $.41 (2.6 times usual volume) when stock was trading $11.12
Paper bought 1575 MBI May 13 Calls for $.40 when stock was trading $10.19
A Reason to be Bearish: $CAT ($SPY, $QQQ) 4.1.2013
From the technical prospective, CAT shares are below the 200, 150, 100, and 50 day moving averages. The copper market is also below these moving averages, echoing the bearish technical set-up.
In recent news, Susquehanna analyst Ted Grace lowered his 2013 EPS estimates from $8.00 to &7.45. And just today the ISM index fell to worse-than-forecasted levels…both not helping the CAT bulls in the short term.
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Author
salernoma@mx.lakeforest.edu
Options Trading
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What are Options?
What are Options: Definition
An option is simply a contract that guarantees the right to buy or sell an underlying asset at a specific price before a certain date. An option is another type of security, like a stock or bond. The price the option guarantees its owner is called the strike price. An options contract generally represents 100 underlying shares. The income earned by the seller of an option contract is called the premium.
What are Options: Calls and Puts
There are two types of options: calls and puts. A call gives its owner the right to buy an asset at a certain price before a certain date. A call holder hopes the stock price will increase before the option expires. A put gives its owner the right to sell an asset at a certain price before a certain date. A put holder hopes the stock price will decrease before the option expires.
What are Options: Example
Someone buys an options contract to buy 100 shares of stocks for $80 dollars for $200. The contract expires in 180 days. If the stock price grew to $85 dollars before the 180 days, the options holder would have the right to buy the 100 shares at $80 strike price, essentially saving $500 while paying the option’s seller the $200 premium.
UA Fundamentals (UA, SPY) 3.15.2013
Under Armour has made many inroads into different sectors of the retailing market. As mentioned before, these include the shoe, casual, and female market for example. A risk to these efforts is if these investments don’t pay off, or the consumer rejects their products. It is interesting to note too that the stock has over 17% short interest. This may indicate that some of Wall Street believes UA is overvalued and does not present great prospects as it once did before from a risk reward prospective.
The front month options imply a $4.4 range up or down by expiration in just over 30 days. This is about an 8% move up or down.
