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by 1/9/2001 2:13 PM
Stocks quoted in this article:
In the current market, which isn't quick to forgive, who would have thought that a company could report earnings that miss estimates by 28 cents, only to rally over 10 percent on heavy volume? Well, when the stock is beleaguered Rite Aid (RAD – 3-5/16), any nugget of good news is phenomenal news, and the firm's same-store sales numbers were apparently enough to make the Street forget about the firm's downside earnings surprise.

This morning before the open, the pharmaceutical retailer announced a 74-cent loss for the third quarter, significantly steeper than the 46-cent loss analysts had been expecting. However, the firm promptly followed up this report with news that same-store sales for the quarter climbed 10 percent. RAD officials also said they have confidence that the retailer will be able to generate the cash needed to succeed in the long term.

Technically speaking, RAD has fallen off a fairly steep cliff in the past two years, losing over 93 percent of its share price. The security has now been trading in single-digit territory for just under a year. <
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by 1/9/2001 2:00 PM
Stocks quoted in this article:
Brick-and-mortar book and music retailer Barnes & Noble (BKS – 22-5/16) reluctantly admitted today that holiday sales failed to cut the proverbial mustard. Similar to other retailers in the same boat, the firm cited the stock market's downturn and severe winter storms as factors that kept shoppers out of stores this December. The company went on to say that these disappointing sales numbers will impact the bottom line to such an extent that it miss fourth-quarter earnings estimates by around 10 percent.

This news comes less than one week after competitor Borders Group (BGP – 11-7/8) reported similar woes. Although BKS officials said they remain confident about fiscal year 2001, this assertion was not enough to stave off the 10-percent drawdown the shares have suffered today. Since last Thursday's close, BKS shares have fallen nearly 20 percent. Relief may be in sight, however, as the equity is currently perched just above its 20-week and its 10-month moving averages. <
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by 1/9/2001 12:13 PM
Stocks quoted in this article:
In an early-afternoon press release, United Parcel Services (UPS - 60-13/16) announced a $6 billion aircraft order from the European aircraft consortium Airbus. The deal will be spread over a total of nine years and includes options to purchase an additional 50 aircraft. Technically speaking, UPS is attempting to overcome resistance at the 61 level. <
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by 1/9/2001 10:31 AM
Stocks quoted in this article:
Intel (INTC - 32-7/8) has been trading in a firm range between the 30 and 35 strikes since December 14. An analysis of the options open interest configuration on INTC indicates that call sellers at the 35 strike and put sellers at the 30 strike will be extremely happy if this price action continues through January expiration on January 16.

The peak put open interest for INTC resides at the 30 strike, where there is over 67,000 contracts. Those that sold puts to open positions would love to see INTC close above 30 at January expiration. At the same time, there is heavy call open interst at the INTC January 35 strike, where there is over 60,000 contracts. Those that sold 35-strike calls would welcome INTC closing below 35 on January expiration.

If the shares approach 35 as expiration nears, demand for INTC shares could temporarily overcome supply as call sellers hedge their positions by going long INTC stock to offset losses as the calls increase in value. Or, if the shares approach 30 as expiration nears, supply could temporarily overcome demand for INTC stock as put sellers look to hedge their positions by shorting INTC stock. <
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by 1/9/2001 8:57 AM
Stocks quoted in this article:
Biopharmaceutical company Enzon (ENZN – 47-11/16) has been pulled lower by weakness in the biotech sector over the last three trading sessions. ENZN has given back over 22 percent since last Wednesday's close. The stock was able to manage a bounce yesterday off potential long-term technical support in the form of its 20-month moving average. This trendline acted as rough support for the stock during its spring plunge.

In yesterday's trading, the January 60 call was active. Nearly 1,100 contracts changed hands on the out-of-the-money option, with about 900 contracts of the volume translating into new open interest. <
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