Weekly Weekly’s 11.14.14

JC Penney and Cisco are in play post earnings!

Next week is traditional options expiration, so today I’m mainly focused on options expiring this Friday, November 14th.

Starting with JCP. A trader told me this one was difficult to predict how the earnings move would shape up. JCP reported a sales miss, but its loss was less than anticipated. Traders really want to know if the turnaround is working at the retailer. JCP is trading around $7.20 and there are more puts than calls trading now that the earnings news it out. The 7 and 7.5 put option strikes are generating interest. And, there are calls active at the 7.5 line in JCP. But, at this point of the session the heaviest action is centered around the 7 put strike.

Cisco topped on earnings and the stock is trading $25.40. The call buyers are stepping into the Weeklys at the 25 and 26 strikes. I would also note there are puts trading at the 25 strike. So far today, the options market seems to suggest CSCO will settle at 25.5 at options expiration Friday.  As a side note, John Burnside of Freeboard Capital is on my ‘In The Money Show’ right on this website talking about his collar options strategy in Cisco. John is using a collar strategy  because he says he likes the stock but wants to the protection options offer. Click on my show if you have the chance.

Applied Materials reports earnings after the close. As AMAT trades $22 most of the action is centered around the call side. The 27 and 27.5 strikes are especially active. However, there is an interesting “inexpensive” hedge play that popped up.  There are 1,000 put contracts that are way out-of -the money at the 18 strike going for one penny.

Youko offers results tonight and the straddle is pricing in a major move of 9% off the 21.5 strike.

Taking a look at big movers this week….

Alibaba has been making it onto the most active list this week. Reports say the founder Jack Ma may consider buying a larger stake in Youku for its video streaming capabilities. BABA has had a decent range this week that traders have enjoyed. Today BABA is on the move to $119 today. Traders are coming for the calls at the 118, 119, and 120 strikes. That could even be a spread play. It’s becoming clear through the options paper that traders are rolling their strikes higher in BABA. The stock, for now, appears to have upside momentum.

It’s another week of new highs for Apple! Today APPL is trading $112 and calls are active at 112, 113 and 114.strikes. Calls are more predominate than puts at this juncture of the session, but the puts are more expensive than the calls in a possible sign traders are willing to “pay up” for that put protection in Apple. Again, spread plays appear to be popular in the Apple options trade.

Lulemon has a spike in implied volatility that traders are paying attention to this week. Vol is at the upper end of the range again today at 58. Although, options paper is light in LULU. The smattering of options paper that is active includes the 43 calls and the 44 and 44.5 puts.

The S&P 500 has been a record setter this week. Today the SPX is attracting an abundance of calls versus puts. Calls are active at 2,045 and 2,065 strikes. On the Put side the 2,025 strike is active.

And finally,… One name has been added to the list of available Weeklys: American Outfitter.
And, one name has been deleted: GW Pharmaceuticals.

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