2014-07-02 Smart Money Report (CP) (WLT)


Posted on July 2nd, by Mitchell Warren in Free Articles, Options Risk Management, Smart Money Report, Unusual Options Activity. Comments Off on 2014-07-02 Smart Money Report (CP) (WLT)

Smart Money Report

  1. BAC- 35,000 Aug. 16 $17 calls were bought for $0.09-$0.11 each, against open interest of 101,282 contracts. Earnings are due out on 7/16. Bank of America was upgraded at Deutsche Bank to a buy rating last night with a $18 price target.
  2. CP- 4,300 July $175 puts were sold for $1.35 each, against open interest of 333 contracts. Earnings are due out on 7/17. Canadian Pacific Railway trades at a P/E ratio of 17.38x (2015 estimates), PEG ratio of 0.73x (2015 estimates), 7.7% revenue growth, and has an average analyst price target of $193. On 6/30, Barclays maintained a overweight rating with a $196 price target. The stock has moved higher after earnings on the last three reports.
  3. SPLS- The Jan. 2015 $9/$13 bull risk reversal was put on 10,000 times for a $0.05 debit. Volume was above the open interest in both options. Options activity is over 3x the average daily volume. The trader is looking for Staples to move back up to the May highs over the next 5-6 months.
  4. WLT- The Sep. $4/$8 strangle was put on 5,968 times for a $0.37 credit. Volume was above the open interest in both options. Earnings are due out on 7/31. This is a bet on Walter Energy staying between $4 and $8 over the next 2-3 months.
  5. YRCW- The Jan. 2016 $25/$30 bull risk reversal was put on 2,500 times for a $1.00 debit. Volume was above the open interest in the Jan. 2016 $25 puts. Option activity is over 3x the average daily volume. Net call premium is +$1.7M vs. net put premium of -$1.4M.

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