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Wednesday, January 25th, 2012
9:00am (EST)
Oh, baby do you know what that’s worth? ($100 billion)
Oh, Heaven is a place on Earth.
They say in Heaven, love comes first
We’ll make Heaven a place on Earth.
Steve Jobs is certainly smiling from up above and it feels as though he never left us. We thought today’s blast from the past was the perfect song to start our morning as we look ahead to the opening bell…
The market made a nice rebound off yesterday’s lows and remained in a tight range for the rest of the day as Wall Street awaited Apple’s (AAPL, $420.41, down $7.00) quarterly results. Despite the nervousness of an Apple letdown, Tech had a strong day compared to other sectors which helped the major averages hold support as the market ended mixed.
The Dow fell 33 points, or 0.3%, to close at 12,675 while the S&P slipped a point to finish at 1,315. The Nasdaq added 2 points to settle at 2,786 but failed to crack 2,800 but this shouldn’t be an issue today.
As far as Apple’s numbers, needless to say, the suit-and-ties were divided heading into the report as half the analysts seemed to be giddy while the other half said there was a chance for an earnings miss – but none of them seemed sure or wanted to bet the ranch. Shares were halted until 4:50pm (EST) in extended trading last night which was a little unusual and goes to show how the much Wall Street weight the company had on its shoulders.
There were over 125 Apple articles within 3 hours after the close on Yahoo’s (YHOO, $15.69, up $0.01) Finance page yesterday talking about Apple’s mind-boggling results.
The company reported a profit of $13 billion, or $13.87 a share, on revenue of $46 billion. The pencil-pushers were looking for earnings of $10 billion on $39 billion in sales. A quick rundown on the record 3 months: 37 million iPhones sold during the quarter, over 15 million iPads, and 5 million Macs. To put things in perspective, the number of iPhones and iPads sold were over 100% increases from the prior quarter. We didn’t even mention the iPods sold for the quarter and the fact its iTunes store is approaching $2 billion sales. By the end of this year, iTunes alone could be a double-digit billion dollar business!
Apple added another $16 billion to its coffers and now has nearly $100 billion in its war chest. Yes, the company ended the quarter with $97.5 billion in cash and marketable securities on its books. Wow.
Once again, we were hoping for a stock-split of 4-for-1 which would have gotten shares down to $100 or so but Apple hasn’t split its stock since 2005 when it did a 2-for-1 deal.
The options on a $400 stock can be expensive and we looked at the Apple February 370 puts (AAPL120218P00370000, $1.80, up $0.35) and the February 470 calls (AAPL120218C00470000, $1.20, down $0.80) yesterday as a possible strangle option trade after our update which represented a $50 move in the stock. We were calculating a 10% swing either way which would get shares to $380 or $460 based on the price at the time. The 10% move wasn’t enough to get the stock past these strike prices which made us nervous because we want shares to move enough to cover the cost of the trade.
Apple shares were up $30 to $450 in after-hours trading last night once they opened and did hit a high of $470 before chilling. This morning they are at $454, up $34. The puts will take a huge hit while the calls should get a nice pop at the open.
As you can see, the option premiums are rich on triple-digit stocks and you need a massive move in the stock to hopefully make a decent return. We would rather play options on stocks on under $100 where a 5% move would double your money or make you 100+% with the right option.
Apple is one of the few triple-digit stocks we wish we could play options on but the risks outweigh the rewards, especially when selling these types of options. No worries. There are hundreds of other stocks we follow under $100 that trade options and we have no problem letting the big boys trade Apple while we focus on Microsoft (MSFT, $29.34, down $0.39), Aflac (AFL, $49.07, up $1.02) and MGM Resorts (MGM, $13.16, up $0.02).
Our subscribers have banked 125% on Microsoft calls, 127% on Aflac call options, and 131% and 114% on 2 MGM call option trades this month alone. Our Seagate Technology (STX, $19.75, up $0.07) also made 100%. That’s 5 triple-digit call option trade winners on stocks that have moved $1-$3 in the last 3 weeks.
With futures up this morning thanks to Apple, we are hoping our other call option trades get some nice pin action.
Futures are mixed as we head to press and look like this: Dow futures are down 35 points to 12,591 while the S&P futures are off by 3 points to 1,308. The Nasdaq futures are showing a 18 point pop and are at 2,445.
Subscribers, check the Members Area for the updates and stay on your toes for possible Trade Alerts. With the Fed speaking at noon, we could be in for a wild ride today as we near the July and April 2011 market highs.
Tags: AAPL, AAPL earnings, Apple stock options), call options, put options, YHOO
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, April 20th, 2011
8:50am (EST)
The bulls recovered from Monday’s haymaker and rebounded to push the market higher on Tuesday. Believe it or not, there were a couple of decent housing reports released before the bell which helped futures firm up and led to a solid open. The bulls cruised until halftime which is when the bears showed up but their stay was brief as the bulls powered forward and pushed the market to new highs before the close.
The Dow added 65 points, or 0.5%, to finish at 12,266 while the S&P gained 7 points, or 0.6%, and ended at 1,312. The Nasdaq popped nearly 10 points, or 0.3%, and settled at 2,744.
There was a lot riding on last night’s and this morning’s earnings so let’s cover some of the highlights:
Yahoo (YHOO, $16.12, down $0.22), Intel (INTC, $19.86, up $0.24), Juniper Networks (JNPR, $38.47, up $0.21) and Wynn Resorts (WYNN, $138.93, down $1.57) beat estimates after Tuesday’s close. It was good to see some of the old Tech leaders come in with solid reports and all 4 stocks are up in pre-market action.
We have been following Wynn Resorts for a few weeks now as shares continue to set new 52-week highs and we like the company’s recent deal with PokerStars.com. Our wonderful government shut down U.S. online poker sites on Friday, but we think there is too much money to be made for it not to be legal.
Wynn will be a major player and teamed up with PokerStars to push legislation forward but this was obviously a blow to the hundreds of thousands of Americans who have their money locked up in online poker accounts. For years these sites have said it was legal to play and have allowed deposits but Uncle Sam wants his piece of the pie too.
This litigation will take months (or longer) to resolve but we like Wynn for its long-term prospects as well. They are our favorite when it comes to Casino stocks but playing options on Wynn can be expensive. We recently profiled some September call options on Wynn inside our Members Area but we missed the trade because we were hoping to get better prices. Instead, we didn’t get our entry price and the options have nearly doubled.
Elsewhere, Cree (CREE, $40.81, down $0.26) shares were down 6% in after-hours last night and touched a low of $38.10. The company reported quarterly profits fell nearly 60% to $18.9 million, or $0.17 a share, down from $44.6 million, or $0.41 a share, in the year period.
Excluding items, Cree would have earned $0.27 a share while Wall Street had penciled in $0.30 a share. Revenue came in at $219 million versus last year’s figure of $234 million, and also below the $221 million the suit-and-ties had penciled in.
Futures are pointing towards a massive rally at the open. Dow futures are up 148 points to 12,374 while the S&P 500 futures are higher by 18 points to 1,327. Nasdaq futures are advancing 30 points to 2,341.
We have a lot to cover in our Members Area so let’s get to it.
Tags: call options, CREE, high beta stocks, Hot stocks, INTC, JNPR, momentum options, Momentum stocks, option tips, options trading course, stock market options, strangle option trades, weekly options, WYNN, YHOO
Posted in Earnings, Hot Stocks | Comments Off
Wednesday, July 21st, 2010
12:50pm (EST)
The bulls are ready to add to yesterday’s gains as the market is trading slightly higher ahead of today’s “big event”. There have been a few positive earnings announcements this morning as a number of companies beat expectations on the top and bottom lines. There have also been some earnings duds.
Wall Street will be watching Fed Chairman, Ben Bernanke, as he gives the boys on the hill an update in about an hour or so. The market will be looking for any hints on what the Fed might do to stimulate growth or if he sees any signs of an economic slowdown in the second half.
Big Ben will also do a follow-up on Thursday. His tone and body language will be crucial on how we close out the day. He has been known to shine at times for the bulls but he has also made the bears look brilliant when he wallows.
Yahoo (YHOO, $13.93, down $1.27) is trading at 52-week lows after missing Wall Street’s numbers. The company seems to be stuck in the mud so we won’t go over the results.
As we head to press, the Dow is higher by 14 points to 10,244 while the S&P 500 is up by 1 to 1,084. The Nasdaq is bucking the trend and is down 2 points at 2,220.
We will be back in the morning with a full update but look for the S&P to run into resistance at 1,100 if the bulls can muster up a rally. If the bears wake-up, look for 1,050 to be tested again.
Tags: call options, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options, Yahoo, YHOO
Posted in Company Commentary, Earnings, Market Analysis | Comments Off
Monday, March 8th, 2010
9:00am (EST)
Futures are trading in a narrow range this morning as we get ready for the upcoming week. There is little economic data due out during the first half of this week and earnings are coming to a crawl so Wall Street will be looking for other cues to give the market direction.
Asian markets surged last night in their first trading session following the upbeat U.S. jobs report but the European markets fell slightly.
The good news, if you are bullish, is that there are a lot of upgrades on stocks this morning that could get the bulls in a buying mood.
Research In Motion (RIMM, $69.50, down $0.48), Yahoo (YHOO, $16.06, up $0.25) and U.S Steel (X, $58.90, up $2.26) all got upgrades and are showing higher bids in pre-market trading.
M&A (mergers and acquisitions) activity continues to pick up… American International Group (AIG, $28.08, up $1.37) is selling one of its major foreign subsidiaries (Alico) to MetLife (MET, $38.92, up $0.81) for $15.5 billion. It is the second major sale for AIG this month as the company tries to get leaner and meaner.
The Entertainment stocks could get a pop after seeing “Alice in Wonderland ” bring in a whopping $116 million in its opening weekend – a record for a 3-D film. We knew Alice would be a hit and the total easily surpassed all other films in release and gave Walt Disney (DIS, $33.22, up $0.65) an even bigger opening than “Avatar.” Imax (IMAX, $13.72, up $0.40) also benefitted as their theaters were packed all weekend long.
Earnings:
Monday: Casey’s General Stores (CASY, $31.86, up $0.21), Kronos Worldwide (KRO, $15.69, down $0.27), ResCare (RSCR, $9.53, up $0.34), TiVo (TIVO, $17.50, up $0.97) and Value Line (VALU, $25.42, up $0.45).
Tuesday: Boston Beer Company (SAM, $50.54, up $0.74), Dick’s Sporting Goods (DKS, $25.19, up $0.83), J. Crew Group (JCG, $45.61, up $1.55), Kroger (KR, $22.74, up $0.05), Overstock.com (OSTK, $13.43, up $0.35) and Tootsie Roll (TR, $28.17, up $0.87).
Wednesday: American Eagle Outfitters (AEO, $16.74, up $0.01), Bon-Ton Stores (BONT, $11.78, up $0.68), Elbit Systems (ESLT, $60.58, up $0.09), Gymboree (GYMB, $45.15, up $0.40), Hot Topic (HOTT, $6.71, up $0.08), Men’s Wearhouse (MW, $25.17, up $0.74) and Vail Resorts VPFG, $15.48, up $0.18).
Thursday: Aeropostale (ARO, $25.56, up $0.56), Goldcorp (GG, $40.37, up $0.80), National Semiconductor (NSM, $14.67, up $0.04), Pall Corp (PLL, $41.32, up $0.68), Piedmont Natural Gas (PNY, $26.74, up $0.35) and Smithfield Foods (SFD, $19.09, down $0.36),
Friday: AnnTaylor Stores (ANN, $18.50, up $0.53), Citi Trends (CTRN, $29.50, up $0.13) and Kirkland’s (KIRK, $18.81, up $0.81),
As we head to press, Dow futures are up 7 points, S&P 500 futures are up a point while the Nasdaq 100 futures are up 2. Current subscribers, check the Members Area for the updates.
Tags: AIG, DIS, met, option picks, option signals, options alerts, RIMM, stock options trading, x, YHOO
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off
Friday, May 2nd, 2008
Well, well, well. It appears Microsoft’s (MSFT, $29.24, down $0.16) Steve Ballmer is not a man of his words. For someone who had said that Microsoft wouldn’t raise its offer for Yahoo (YHOO, $28.67, up $1.86) because the original offer was “fair”, Mr. Ballmer is now willing to pay not a “dime above” but $2 more to get a deal done. I say “not a dime above” because that is what he had said on Thursday.
Talk is cheap and while the news is good for Yahoo’s shareholders it lowers the drama factor. Not that I was hoping for Yahoo’s stock to drop or anything but it would have been (and still could be) interesting to see what would’ve happened had Microsoft walked away. Nothing is official but this brings the two that much closer.
Like something out of Hollywood both companies have followed the script to a “T”. But like any movie that drags on after an exciting start most people just want the thing to hurry up and be over with. Yahoo was up another $1.03 to $29.70 in after-hours trading while Microsoft shed another 12 cents.
Rick Rouse
Rick@OptionsMentoring.com
Tags: MSFT, Steve Ballmer, YHOO
Posted in Yahoo / Microsoft | No Comments »
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Apple’s (AAPL) Stunning Quarter
Wednesday, January 25th, 2012
9:00am (EST)
Oh, baby do you know what that’s worth? ($100 billion)
Oh, Heaven is a place on Earth.
They say in Heaven, love comes first
We’ll make Heaven a place on Earth.
Steve Jobs is certainly smiling from up above and it feels as though he never left us. We thought today’s blast from the past was the perfect song to start our morning as we look ahead to the opening bell…
The market made a nice rebound off yesterday’s lows and remained in a tight range for the rest of the day as Wall Street awaited Apple’s (AAPL, $420.41, down $7.00) quarterly results. Despite the nervousness of an Apple letdown, Tech had a strong day compared to other sectors which helped the major averages hold support as the market ended mixed.
The Dow fell 33 points, or 0.3%, to close at 12,675 while the S&P slipped a point to finish at 1,315. The Nasdaq added 2 points to settle at 2,786 but failed to crack 2,800 but this shouldn’t be an issue today.
As far as Apple’s numbers, needless to say, the suit-and-ties were divided heading into the report as half the analysts seemed to be giddy while the other half said there was a chance for an earnings miss – but none of them seemed sure or wanted to bet the ranch. Shares were halted until 4:50pm (EST) in extended trading last night which was a little unusual and goes to show how the much Wall Street weight the company had on its shoulders.
There were over 125 Apple articles within 3 hours after the close on Yahoo’s (YHOO, $15.69, up $0.01) Finance page yesterday talking about Apple’s mind-boggling results.
The company reported a profit of $13 billion, or $13.87 a share, on revenue of $46 billion. The pencil-pushers were looking for earnings of $10 billion on $39 billion in sales. A quick rundown on the record 3 months: 37 million iPhones sold during the quarter, over 15 million iPads, and 5 million Macs. To put things in perspective, the number of iPhones and iPads sold were over 100% increases from the prior quarter. We didn’t even mention the iPods sold for the quarter and the fact its iTunes store is approaching $2 billion sales. By the end of this year, iTunes alone could be a double-digit billion dollar business!
Apple added another $16 billion to its coffers and now has nearly $100 billion in its war chest. Yes, the company ended the quarter with $97.5 billion in cash and marketable securities on its books. Wow.
Once again, we were hoping for a stock-split of 4-for-1 which would have gotten shares down to $100 or so but Apple hasn’t split its stock since 2005 when it did a 2-for-1 deal.
The options on a $400 stock can be expensive and we looked at the Apple February 370 puts (AAPL120218P00370000, $1.80, up $0.35) and the February 470 calls (AAPL120218C00470000, $1.20, down $0.80) yesterday as a possible strangle option trade after our update which represented a $50 move in the stock. We were calculating a 10% swing either way which would get shares to $380 or $460 based on the price at the time. The 10% move wasn’t enough to get the stock past these strike prices which made us nervous because we want shares to move enough to cover the cost of the trade.
Apple shares were up $30 to $450 in after-hours trading last night once they opened and did hit a high of $470 before chilling. This morning they are at $454, up $34. The puts will take a huge hit while the calls should get a nice pop at the open.
As you can see, the option premiums are rich on triple-digit stocks and you need a massive move in the stock to hopefully make a decent return. We would rather play options on stocks on under $100 where a 5% move would double your money or make you 100+% with the right option.
Apple is one of the few triple-digit stocks we wish we could play options on but the risks outweigh the rewards, especially when selling these types of options. No worries. There are hundreds of other stocks we follow under $100 that trade options and we have no problem letting the big boys trade Apple while we focus on Microsoft (MSFT, $29.34, down $0.39), Aflac (AFL, $49.07, up $1.02) and MGM Resorts (MGM, $13.16, up $0.02).
Our subscribers have banked 125% on Microsoft calls, 127% on Aflac call options, and 131% and 114% on 2 MGM call option trades this month alone. Our Seagate Technology (STX, $19.75, up $0.07) also made 100%. That’s 5 triple-digit call option trade winners on stocks that have moved $1-$3 in the last 3 weeks.
With futures up this morning thanks to Apple, we are hoping our other call option trades get some nice pin action.
Futures are mixed as we head to press and look like this: Dow futures are down 35 points to 12,591 while the S&P futures are off by 3 points to 1,308. The Nasdaq futures are showing a 18 point pop and are at 2,445.
Subscribers, check the Members Area for the updates and stay on your toes for possible Trade Alerts. With the Fed speaking at noon, we could be in for a wild ride today as we near the July and April 2011 market highs.
Tags: AAPL, AAPL earnings, Apple stock options), call options, put options, YHOO
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off