9:05am (EST)
The bears took another critical step towards gaining full control of the market on Thursday after taking the Dow down 115 points to 10,120. The bulls showed up for about 20 minutes yesterday then bailed as the market awaited Ben Bernanke’s future. Drama over, he is with us for another term.
Selling pressure picked up as the Dow sank to a low of 10,055 as the market awaited the Bernanke news but came off its lows only to drop again into the close. The S&P 500 also fell a little over 1% as the index lost 13 points to close at 1,084. However, the most damage occurred in the Nasdaq as it sank 42 points, or 1.9%, and closed at 2,179.
There are plenty of earnings reports to talk about this morning but we want to focus on Amazon.com’s (AMZN, $126.03, up $3.28). The company reported a profit of $384 million, or $0.85 a share, versus $225 million, or $0.52, in the year-earlier period. Revenue rose 42% as Amazon.com stated the 2009 holiday shopping season was its best ever.
Wall Street had been expecting a profit of 72 cents on $9 billion in revenue.
We profiled an Amazon strangle option trade in yesterday’s 1pm update after showing you how these trades would have worked with Netflix (NFLX, $63.04, up $12.07) for a 200% return.
The Amazon February 135 calls (QZNBG, $3.60, up $0.65) and the February 115 puts (QZNNC, $3.20, down $0.60) would cost $6.70 or $670 for one contract of each when we profiled the trade. The calls traded higher after our 1pm update while the puts traded lower but the same amount was still at stake going into the closing bell.
The volatility was insane once the company announced earnings though. In after-hours last night the shares opened lower and traded down to $115 before rebounding to trade to a high of $131. Shares ended at $129 and this morning in pre-market trading the stock is right at those levels.
We will have to update how this trade would have done in our 1pm update but we told you yesterday the premiums were rich. Amazon might not get the move to make this a successful play which is why we avoided it but shares will be on the move.
We are looking at a strong open this morning as the Dow futures are up 70 points while the S&P 500 futures are up 9. The Nasdaq futures are up 16.
Tags: option picks, option signals, options alerts, stock options trading
This entry was posted
on Friday, January 29th, 2010 at 9:08 AM and is filed under Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary.
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Futures Point Towards Strong Open
9:05am (EST)
The bears took another critical step towards gaining full control of the market on Thursday after taking the Dow down 115 points to 10,120. The bulls showed up for about 20 minutes yesterday then bailed as the market awaited Ben Bernanke’s future. Drama over, he is with us for another term.
Selling pressure picked up as the Dow sank to a low of 10,055 as the market awaited the Bernanke news but came off its lows only to drop again into the close. The S&P 500 also fell a little over 1% as the index lost 13 points to close at 1,084. However, the most damage occurred in the Nasdaq as it sank 42 points, or 1.9%, and closed at 2,179.
There are plenty of earnings reports to talk about this morning but we want to focus on Amazon.com’s (AMZN, $126.03, up $3.28). The company reported a profit of $384 million, or $0.85 a share, versus $225 million, or $0.52, in the year-earlier period. Revenue rose 42% as Amazon.com stated the 2009 holiday shopping season was its best ever.
Wall Street had been expecting a profit of 72 cents on $9 billion in revenue.
We profiled an Amazon strangle option trade in yesterday’s 1pm update after showing you how these trades would have worked with Netflix (NFLX, $63.04, up $12.07) for a 200% return.
The Amazon February 135 calls (QZNBG, $3.60, up $0.65) and the February 115 puts (QZNNC, $3.20, down $0.60) would cost $6.70 or $670 for one contract of each when we profiled the trade. The calls traded higher after our 1pm update while the puts traded lower but the same amount was still at stake going into the closing bell.
The volatility was insane once the company announced earnings though. In after-hours last night the shares opened lower and traded down to $115 before rebounding to trade to a high of $131. Shares ended at $129 and this morning in pre-market trading the stock is right at those levels.
We will have to update how this trade would have done in our 1pm update but we told you yesterday the premiums were rich. Amazon might not get the move to make this a successful play which is why we avoided it but shares will be on the move.
We are looking at a strong open this morning as the Dow futures are up 70 points while the S&P 500 futures are up 9. The Nasdaq futures are up 16.
Tags: option picks, option signals, options alerts, stock options trading
This entry was posted on Friday, January 29th, 2010 at 9:08 AM and is filed under Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.