Midday Market Check: Dow Jones Industrial Average Clings to Breakeven Ahead of Fed Statement

The Dow Jones Industrial Average (INDEXDJX:DJI) is flat ahead of this afternoon's FOMC announcement

Oct 29, 2014 at 11:57 AM
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The Dow Jones Industrial Average (INDEXDJX:DJI) is sticking close to breakeven -- and the newly reclaimed 17,000 level -- as traders sit on the sidelines ahead of this afternoon's Federal Open Market Committee (FOMC) policy statement, due at 2 p.m. ET. Meanwhile, the Nasdaq Composite (COMP) is modestly lower, after Facebook Inc (NASDAQ:FB) followed Twitter Inc's (NYSE:TWTR) earnings lead.

Continue reading for more on today's market, including:

  • Find out which Brazilian bank is heating up the options pits.
  • The accounting confession that's resulted in record lows.
  • Plus ... Checking in on the CBOE Volatility Index (VIX), the SPDR S&P 500 ETF Trust (SPY), and other noteworthy stats at midday.

Midday Market Stats

Across the 12 major options exchanges, calls are more active than puts today. One stock with notable call volume is Brazilian bank Itau Unibanco Holding SA (ADR) (NYSE:ITUB). After plummeting in the wake of Brazil's presidential election on Monday -- and ahead of the company's earnings release this Tuesday, Nov. 4 -- ITUB was last seen 0.8% higher at $13.80. Calls are trading at 16 times the typical intraday pace, though most of the action looks attributable to a bull call spread. Specifically, a trader bought to open 7,000 January 2015 14-strike calls, and sold to open an equal amount of January 2015 15-strike calls, resulting in a net debit of $0.45 per pair of contracts -- which represents the maximum risk on the trade. The buyer will profit if ITUB climbs above $14.45 (bought strike plus net debit) by the time January-dated options expire, though the sold calls limit her maximum gain to $0.55 (difference between strikes, minus net debit) per spread, no matter how far ITUB should rally north of $15.

For more midday statistics and stocks on the move, head to page 2.

The biggest loser on the Big Board is InvenSense Inc (NYSE:INVN), which has shed about a quarter of its value to land at $16.24, as Wall Street reacts to a dismal earnings report. INVN is testing a foothold in the $16 region, which emerged as support in late 2013, and is poised to close the week south of its 80-week moving average for the first time since late May 2013.

Meanwhile, over on the Nasdaq, American Realty Capital Properties Inc (NASDAQ:ARCP) is among the biggest losers, down 29.4% at $8.70 -- a new record low. Traders are digesting the real estate investment trust's accounting confession, as well as the firm's subsequent decision to axe both its chief financial officer and chief accounting officer.

Monthly Chart of ARCP since September 2011

After kicking off the session in the red, pre-Fed jitters have propelled the CBOE Volatility Index (VIX) 0.9 point, or 5.9%, higher, to 15.24. The "fear gauge" remains 5.4% lower week-to-date.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) stands at 1.34, with puts outnumbering calls. SPY is fractionally higher at $198.47.


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