2014-07-15 Smart Money Report (BAC) (INTC)
Smart Money Report
- BAC- Bank of America is set to release Q2 earnings before the bell tomorrow morning. Analysts are looking for $0.29 in EPS and revenue of $21.6 billion. The options market is implying a $0.48 move, or 3.06%, in either direction through Friday’s close. The call to put ratio is currently 2.06, led by a buyer of 6,732 Aug. 16 $15 calls for $0.94 each. Shares of Bank of America have moved higher after earnings on three out of the last four reports. On 7/7, Oppenheimer maintained an outperform rating, but raised their price target to $20 from $19.
- INTC- Intel is set to release Q2 earnings after the bell tonight. Analysts are looking for $0.52 in EPS and revenue of $13.7 billion. The options market is implying a $1.03 move, or 3.28%, in either direction through Friday’s close. The call to put ratio is currently 1.87. From 7/3-7/11 there was large buying in the July 19 $32 and Oct. $34 calls. Shares of Intel have fallen after earnings on four out the last seven reports. Both Citigroup (7/15) and Imperial Capital (7/14) initiated the stock with an outperform rating and have a $37 price target.
- KERX- The Dec. $10/$20 bear risk reversal (collar) was put on 7,000 times for a $0.00 debit. Volume was above the open interest in both options. They sold the $20 calls and bought the $10 puts. They have protection or profits below $10 and upside potential to $20 if this is done against a long stock position.
- VLO- 4,500 Jan. 2015 $55 calls were bought for $2.41 each, against open interest of 10,389 contracts. The call to put ratio is over 2:1. Call activity is already at the daily average. Net call premium is +$1.3M vs. net put premium of +$762K. Last night (VLO) lowered Q2 EPS guidance from $1.37 to $1.10-$1.25. Despite the weak outlook, the stock has recovered from last night’s after-hours lows and remains above the 200-day SMA. (VLO) trades at a P/E ratio of 7.85x (2015 estimates) with 7.6% EPS growth (31.2% this year), 1.1% revenue growth (-12% this year), P/S ratio of 0.19x, P/B ratio of 1.34x, 2.02% dividend yield, and has an average analyst price target of $63. On 7/11, Macquarie lowered their price target from $69 to $62.
- XRT- Over 2,800 July 19 $85.50 puts were sold for $0.29-$0.31 each, against open interest of 807 contracts. The retail ETF is down for the 4th consecutive trading session, but has support at the 50-day EMA (currently $85.30).
Summer Sale: From now until the end of August, annual memberships are only $225 (25% off of the regular $299.95 price). This is available for new and existing members. Check out our updated 2014 options performance page here (all stock trades are posted on the Weekend Market Updates).
1 On 1 Options Mentoring: Learn more about 1 on 1 options mentoring courses that help can you improve your trading odds and risk management skills.
Free Trial: If you would like to know more about premium content or you would like a free trial of our service, email me at Mitchell@OptionsRiskManagement.com .
Premium Membership: Join now to gain access to the all of the stock watchlist updates, unusual options activity reports, earnings trade ideas, weekend market updates, Premium Twitter feed, and more! All for just $29.95/month or save by purchasing an annual subscription. Join me and the other ORM traders in the chat room today!