A trader bought 2,200 TIF Dec 80 Calls for $3.20 (3.1 times usual volume) with stock at $80.48
A trader bought 1,800 ONVO Nov 10 Calls for $0.30 (2.5 times usual volume) with stock at $8.77
A trader bought 1,400 RDA Dec 17.5 Puts for $0.10 (5 times usual volume) with stock at $18.17
A trader bought 2,900 TSM Jan 20 Calls for $0.15 (5 times usual volume) with stock at $17.75
A trader bought 2,000 HRB Dec 27 Puts for $0.80 (3.8 times usual volume) with stock at $28.00

Juniper Networks, Inc (JNPR) is a company that designs and sells network infrastructure products and services. The company’s stock is currently trading around $18.97 in a 52 week range of $15.62-$22.98. The stock has been underperforming the market this year having fallen over 3.7% year to date. Despite this weakness in the stock we have seen options traders make some very bullish bets on JNPR today. Early in today’s trading session a trader sold 3,962 JNPR Dec 19 puts for $0.76. This is a very bullish bet that has also involves a high level of risk meaning this traders conviction is relatively high. Although JNPR has been trading in bearish territory since they reported earnings on Oct 22^nd we believe that this order signals for a great covered call set up in JNPR. (more…)

Dean Foods Company (DF) is a food company that operates in the processing and distribution of milk and other dairy products in the U.S. The company’s stock is currently trading around $19.40 in a 52 week range of $17.40-$42.12. The stock has been massively underperforming the market this year with share prices falling over 41% year to date. DF is set to report their most recent quarterly earnings tomorrow before the opening bell. Despite the stock’s dismal performance this year it has been a relatively strong performer on earnings. The stock has rallied 5 of the past 8 quarters with an average move of 11%. On a chart DF is trading in neutral to bearish territory according to the Ichimoku Cloud. The future cloud is flat to downward sloping indicating there is neutral to bearish price action on the horizon. With the neutral to bearish chart and strong historical earnings day performance we believe that DF is setting up well for a iron butterfly. This will have us fading the implied movement in DF and will allow time to work in our favor. We can also choose to skew this trade slightly higher to better set up should the stock head higher. (more…)

A trader bought 5,600 CPWR Nov 11 Calls for $0.10 (2.7 times usual volume) with stock at $10.37
A trader bought 3,300 MM Jan 12.5 Calls for $1.50 (3 times usual volume) with stock at $7.02
A trader bought 5,300 BSX Dec 12 Calls for $0.34 (3.2 times usual volume) with stock at $11.73
A trader bought 4,140 PWE Dec 9-10 Call Spreads for $0.58 (3 times usual volume) with stock at $8.62
A trader bought 14,575 NBL Jan 80 Calls for $1.05 (5 times usual volume) with stock at $73.88

A trader bought 4,700 HST Jan 2015 17 Puts for $1.775 (3 times usual volume) with stock at $18.21
A trader bought 3,434 DLR Apr 40 Puts for $2.50 (2.8 times usual volume) with stock at $45.65
A trader bought 1,518 Dec 55 Puts for $1.05 (2.5 times usual volume) with stock at $56.30
A trader bought 3,000 KRFT Dec 52.5 Puts for $1.00 (2.1 times usual volume) with stock at $52.70

A trader bought 4,140 PWE Dec 9-10 Call Spreads for $0.58 (3 times usual volume) with stock at $8.62
A trader bought 14,575 NBL Jan 80 Calls for $1.05 (5 times usual volume) with stock at $73.88
A trader bought 3,434 DLR Apr 40 Puts for $2.50 (2.8 times usual volume) with stock at $45.65
A trader bought 1,518 Dec 55 Puts for $1.05 (2.5 times usual volume) with stock at $56.30
A trader bought 3,000 KRFT Dec 52.5 Puts for $1.00 (2.1 times usual volume) with stock at $52.70

American International Group, Inc. (AIG) is a global insurance company providing various insurance and financial services to people in more than 130 countries. Shares of AIG are currently trading around $48.50 in a 52-week range of $30.64-$53.33. The stock has been outperforming the broader market this year adding over 34% to share prices year to date. Yesterday’s trading session saw some unusual options activity that indicates traders believe the run in AIG can continue through May of next year. Early in yesterday’s session a trade bought 67,875 AIG May 55 calls for $0.86 and 45,202 May 50 calls for $2.33. These are hugely bullish bets that require an enormous amount of premium. The sheer size of this trade suggests that this trader has a strong belief in further upside in AIG. Although AIG has broken through some key technical levels on a chart the Ichimoku Cloud is still relatively bullish looking. The cloud remains upward sloping indicating strength in AIG. We believe that this big block trade coupled with the strength in AIG this year provides us with a great opportunity for a long-term trade.
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Sotheby’s (BID) is an auctioneer of art and jewelry along with operating finance and dealer units for the brokering of private sales of artwork. Shares of BID are currently trading around $50.05 in a 52 week range of $27.98-$53.61. The stock has been massively outperforming the market this year having added over 52% to share prices year to date. BID is set to report their most currently quarterly earnings on Monday after the close. Analysts are expecting earnings of -$0.47 on revenues of $70.3 million. Historically, the stock is weak on earnings day. The stock has sold off on earnings day 5 of the past 8 quarters with an average move of 3.3%. However the stock is trading very well on a chart. Shares of BID are currently trading well above the Ichimoku Cloud and the future cloud is strongly upward sloping indicating there could be more upside in store for BID. Flows have been bullish in BID as well with large open interest in the Nov 55 call line. Despite the relatively weak historical earnings performance in BID we believe that other factors are lining up well for a long trade in BID ahead of earnings. With the options market currently implying a move of around $3.50 we can look at an upside target around $55 and set up a trade. (more…)

ConocoPhillips (NYSE: COP) is a multinational energy corporation headquartered in Houston, Texas, and also holds the distinction of being the largest petroleum exploration and production company in the world.   COP shares are off about one percent midway through Thursday’s session, with shares trading around $73.00. The stock has modestly outperformed the market thus far in 2013, having risen nearly 25% so far.  Recent bullish order flows suggest COP shares have further room to run to the upside, with a trader buying the 10,000 COP Dec 75s for $0.86, representing an $860,000 bet to the upside.  With COP shares just off their October 29 52-week high, we believe there to be an opportunity for a swing trade:

Trade: Buying shares of COP stock at $73.15 with a stop at $71.45
Target 1:  73.80
Target 2:  $74.45
Target 3: $76.00

Floyd the Barber presents common sense views on the intersection of politics and the markets.  

Friday’s jobs report may be the most crucial one of the year.  Why you ask?  Simple. Because it is the most telling “political” report of the year, and politics is one main driver of the markets.

Last week ADP projected a gain of 130,000 jobs.  Most estimates for Friday’s official number are 100,000 to 120,000.  A number in this range would be good for the market.  It would show continued small gains that are not large enough to put fed tapering back on the table.  Last month’s number was in this range and the market reacted quite well.

However, what happens if the number comes in much lower, as it could.  Say 75,000 or 50,000 or even negative, due to the October government shutdown?

One of 2 things could happen.  First, the market could get very scared very quickly about a weak economy and tank.  Alternatively, the market could perceive these weak numbers as assuring continued fed accommodation, and head higher.  Existing fed policy is the current “drug of choice” for the markets.  One almost gets the feeling that, as long as the fed stays accommodative, the market will continue to be strong—regardless of whatever else happens.

Yet there could be another potential major effect of a very weak October jobs number—the very important political effect of such a number.

In essence, a weak jobs number would re-verify the horrific effect of the shutdown, and related threatened debt ceiling breach.  The current $24B estimated negative economic effect would be highlighted. The very important, resultant political effects would likely be:

**Drastically DECREASED chances of another shutdown in January.

**Drastically DECREASED chances of another debt ceiling drama in February or March.

**INCREASED chances of a small bargain between the D’s and R’s on a budget deal that would provide stability to the economy

**INCREASED chances of a GRAND BARGAIN between the D’s and R’s, which would revise harmful sequestration effects, address the deficit, improve the tax code, and let businesses know the ground rules for the next few years.  Such a grand bargain would be amazingly good news—especially in the longer term—for the markets and economy alike.

All of these outcomes are good—maybe even very, very good.  And they could all result from a weak Friday jobs report.

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