Here is some untied directional options flow that caught my eye in today’s trading:
CMCSA: Comcast has been a massive out-performer in 2016, up nearly 20% on the year, despite it’s current dividend yield at 1.64% just tad above the yield on the 10 year Treasury of about 1.55%. The company is scheduled to report Q2 results on July 27th and the options market is implying about a 3% one day post earnings move in either direction, which is slightly rich to the 2.6% average over the last 4 qtrs. When the stock was $66.90 a trader bought to open 22,000 of the Jan17 60/50 put spreads for $1.04. This put spread breaks-even at $58.96, down 12% from the trading level, but offers gains of up to $8.96 between $58.96 and $50, with max gain below.
The one year chart shows the stock’s recent breakout of the one year range, and also to new all time highs. $60 appears to be fairly decent near term technical resistance:[caption id="attachment_65127" align="aligncenter" width="600"] From Bloomberg[/caption]
F: Ford is expected to report Q2 results on July 28th prior to the open, the options market is implying about a 3% one day post earnings move, which is basically in line with its 4 qtr average but shy of the 10 year average of about 4%. Call volume was 2.5x average daily today with what appeared to be some accumulation in the Feb 29th 13.50 weekly calls. The largest trade of the day was an opening buy of 15,000 of this strike when the stock was $13.56 for 29 cents (30,000 traded on the day). These calls break-even at $13.,79 on next Friday’s close, very near important technical resistance for the better part of 2016.
GM: General Motors is expected to report Q2 results on July 21st and the options market is implying about a 2.7% one day post earnings move which, is shy of the 4 qtr avg of about 3.5%. Call volume ran more than 2x average daily volume today, and 4x that of puts. The largest trade of the day was an opening buy of 12,000 July 22nd 31 calls for 45 cents when the stock was $30.88 shortly after the open. These calls break-even at $31.45 on this Friday’s close.
MCD: the burger chain’s stock saw a fairly epic breakout late last year on the heels of some menu changes and a restructuring orchestrated by a new CEO. The stock is seeing some heavy call buying today at 5x average daily volume, and with calls outnumbering puts 50,000 to 10,000. The largest trade of the day is a buy of 10,000 of the July 29th weekly 128 calls for 66 cents to open when the stock was $124.85. These calls break-even at $128.66, up 3% from the trading level, and down about 2.5% from the all time high made near $132 in early May. I think it is important to note that MCD is trading very near 15 year highs on a P/E basis at nearly 23x expected 2016 eps that consensus has growing 11% year over year on a 3% annual sales decline, its 3rd consecutive.