Dow Jones Industrial Average Tanks 410 After China Plunge

Wall Street Bloodbath; Plus, Tesla Gets Rocked

Jan 4, 2016 at 12:12 PM
facebook twitter linkedin


The Dow Jones Industrial Average (DJIA) is down more than 400 points at midday, tracking the global slump after China's Shanghai Composite was halted on a 7% loss. Meanwhile, the S&P 500 Index (SPX) and Nasdaq Composite (COMP) have both slipped below significant round-number levels -- 2,000 and 5,000, respectively -- and the Institute for Supply Management's (ISM) manufacturing index fell to its lowest reading since 2009.

Continue reading for more on today's market -- and don't miss:


160104mmc

Among stocks with unusual option volume at midday is drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), where calls are crossing the tape at twice their average intraday rate. The stock, which has been the subject of much scrutiny over the last several months, has dropped 4% to trade at $97.55, after high-profile investor Bill Ackman said he sold some 5 million of his shares for tax purposes. Today's put/call volume ratio of 0.22 isn't far off the stock's one-year low of 0.11, seen last June, and the most action is happening on the January 2016 105-strike call, where nearly 14,000 contracts have already traded. However, it looks like most of these calls are being sold to open, meaning the traders are betting on a ceiling for VRX in the near term. 

Lululemon Athletica inc. (NASDAQ:LULU) is one of big winners on the Nasdaq, shrugging off the broad-market slide, up 5.2% at $55.21. The athletic apparel retailer received bullish brokerage notes from Jefferies, Wells Fargo, and J.P. Morgan Securities.

Internet music service Pandora Media Inc (NYSE:P) is among the biggest losers on the Big Board today, off 7.6% at $12.39, thanks to negative analyst attention. Traders have also been betting against P recently, as short interest in the security has jumped 29% during the last two reporting periods to make up more than 16% of Pandora's available float -- hardly surprising, considering the stock has underperformed the S&P 500 Index (SPX) by nearly 40 percentage points over the last three months. 

160104_p


The CBOE Volatility Index (VIX) is up 4.3 points, or 23.7%, at 22.52.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.83, with puts significantly outnumbering calls. SPY was last seen down 5.1 points, or 2.5%, at $198.80 -- its lowest level since early October.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners