Tuesday, November 26, 2024
Bond prices have rallied lately with the expectations that interest rates won’t go quite as high as originally expected. (Bond prices move opposite of yields.) This includes government bonds, corporate bonds, and high yield bonds as well. A very large bullish call spread in iShares iBoxx $ High Yield Corporate Bond ETF (HYG) suggests there […]
A lower than expected CPI number sent stock soaring last week. The SPDR S&P 500 ETF (SPY) jumped 5.5% on the day of the release. Moreover, what looks like a massive covered call trade on SPY also occurred on the day, which may imply the index could climb as high as $420 in the next […]
The collapse in cryptocurrencies (brought about by the insolvency of FTX) spilled over into equities markets last week. Bears are betting that Coinbase (COIN) is going to succumb to the downside pressure as well. While the FTX news was being digested by the market, traders purchased a large amount of puts in COIN, possibly expecting […]
Embattled workout equipment maker Peloton (PTON) posted poor earnings last week, but the stock rallied anyways. While the company was way off on earnings for the quarter, management does expect the business to return to profitability next year. Perhaps that’s why several thousands of put contracts were sold after the earnings release. Investors may be […]
It’s earnings season, so there’s been plenty of options action in single stock names. Recently, a strategist purchased what appears to be a very bullish call spread in Disney (DIS). The call spread – buying one call and selling another at a higher price in the same expiration period – doesn’t expire until right after […]
Hedging against a big stock selloff can be expensive when using options. One way to reduce the cost is by using options spreads. A more complex spread that can be useful in this situation is a put butterfly. A strategist bought over 20,000 put butterflies in SPDR S&P 500 ETF (SPY) that expire at the […]
Tesla (TSLA) traded nearly 3.5 million options contracts the day after earnings last week. However, one unusual block trade really stood out on that day. A strategist placed a roughly one-week put butterfly trade, which has maximized gains if TSLA drops 20% in about a week. The trade starts making money if TSLA drops about […]
With the bond market in focus this year, there’s been plenty of options action in iShares 20+ Year Treasury Bond ETF (TLT). The long-term bond fund is the most active of the treasury bond ETFs, trading around 180,000 options per day on average. A large trader or fund placed a very interesting spread trade last […]
A big deal in the grocery store space was announced last week with the potential acquisition of Albertsons (ACI) by Kroger (KR). The merger would create a grocery chain with roughly 12% control of the US market. It’s difficult to say if the deal will make it through antitrust scrutiny. Interestingly, short-term block options trades […]
One way to trade a potential market rebound without the risk of buying stocks outright is by using covered calls. A covered call will cap the upside of a stock or index, but provides cash flow and a bit of downside cushion. Recently, a trader placed a 20,000-lot covered call trade using iShares Russell 2000 […]
