Dow Jones Industrial Average Set for Another Triple-Digit Beating

3 Ways Puts Can Limit Risk

by Karee Venema

Published on Aug 21, 2015 at 8:49 AM
Updated on Aug 21, 2015 at 8:55 AM

It feels like "Groundhog Day" on Wall Street, with the Dow Jones Industrial Average (DJIA) poised for another triple-digit drop -- which would be its third in as many days. Fears of a global growth slump have once again stoked the risk-off attitude, following dismal manufacturing data out of China. The report has done little to prop up crude oil, either, with black gold on pace for its eighth straight weekly drop -- its longest weekly losing streak in almost three decades.

 

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

 

And now, on to the numbers…

 

150821ovfutures

 

Futures on the Dow Jones Industrial Average (DJIA) are nearly 133 points below fair value.

 

5 Things You Need to Know Today

 

  1. A six-year-low in China's purchasing managers manufacturing index (PMI) has sent global markets tumbling.
  2. The CBOE Volatility Index (VIX) closed at its highest perch since July 9 yesterday, prompting a rush toward calls. Among notable trades, a massive block of September 27 calls was apparently bought to open for $2.6 million. Elsewhere, one VIX speculator may have rolled out her long call spread to the October 16-26 strikes from the September 15-25 strikes.
  3. Although it was disappointing user growth numbers -- and not revenue -- that sent shares of Twitter Inc (NYSE:TWTR) reeling in late July, the company yesterday unveiled a new mobile advertising platform, which will include the use of promoted videos and tweets. The stock does not appear poised to capitalize on the news, however, with TWTR down 1% in electronic trading -- and easily on pace to take out yesterday's record low.
  4. Deere & Company (NYSE:DE) is just the latest in this week's batch of dreary earnings reports. Similar to Canadian Solar Inc. (NASDAQ:CSIQ), the company reported a sharp drop in quarterly profit, sending the shares 4% lower ahead of the bell.
  5. Novartis AG (ADR) (NYSE:NVS) has agreed to purchase GlaxoSmithKline plc's (ADR) (NYSE:GSK) multiple sclerosis drug, Ofatumumab, in a deal valued at roughly $1 billion. This is the latest big-dollar deal NVS has unveiled this week, and has the shares 0.7% lower in pre-market trading. GSK, meanwhile, is down 1.3%.

 

150821OV_Buzz

 

 

Market Statistics

 

  • Walt Disney Co (NYSE:DIS), 3D Systems Corporation (NYSE:DDD), and Netflix, Inc. (NASDAQ:NFLX) were among the equities with unusual call and put activity on Thursday. For the entire list, read Unusual Options Activity: DIS, NFLX, MBLY, and DDD.
  • The Chicago Board Options Exchange (CBOE) saw 953,837 call contracts traded on Thursday, compared to 780,901 put contracts. The resultant single-session equity put/call ratio edged up to 0.82, while the 21-day moving average remained at 0.73.
  • For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for August 20, 2015.

 

Earnings and Economic Data

Markit's flash PMI will be released today, along with earnings from Foot Locker (FL). To see what is on next week's agenda -- including the latest batch of retail earnings -- click here.

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