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Tariff-Resistant US Economy Soothes Traders Ahead of Jobs Data
Tariff-Resistant US Economy Soothes Traders Ahead of Jobs Data

Bloomberg

time18 hours ago

  • Business
  • Bloomberg

Tariff-Resistant US Economy Soothes Traders Ahead of Jobs Data

Options traders are betting the S&P 500 Index will post its smallest swing in months following Friday's US employment report, highlighting how a spate of better-than-expected data has calmed investor worries over the economic impact of President Donald Trump's tariffs. The benchmark is projected to move 0.9% in either direction on Friday, according to data compiled by Piper Sandler & Co. That figure, based on the prices of S&P 500 options straddles as of Tuesday's close, is the smallest implied swing ahead of a jobs print since February and below an average realized move of 1.3% over the past year.

Option traders moderately bearish in Advanced Micro Devices with shares down 1.59%
Option traders moderately bearish in Advanced Micro Devices with shares down 1.59%

Yahoo

time24-05-2025

  • Business
  • Yahoo

Option traders moderately bearish in Advanced Micro Devices with shares down 1.59%

Option traders moderately bearish in Advanced Micro Devices (AMD), with shares down $1.76 near $ volume roughly in line with average with 156k contracts traded and calls leading puts for a put/call ratio of 0.76, compared to a typical level near 0.59. Implied volatility (IV30) is higher by 0.9 points near 45.37,and below the 52wk median, suggesting an expected daily move of $3.11. Put-call skew steepened, indicating increased demand for downside protection. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on AMD: Disclaimer & DisclosureReport an Issue AMD Will Be as 'Aggressive as Possible' to Challenge Nvidia Sanmina price target raised to $95 from $87 at BofA Intel Stock (NASDAQ:INTC) Slips as AMD Steps Up at Computex Wall Street Backs Dell's AI Strategy with Buy Ratings AMD's Growth Potential and Strategic Positioning Drive Buy Rating Amid AI Market Opportunities

Tesla Stock At 40% Safety
Tesla Stock At 40% Safety

Forbes

time16-05-2025

  • Automotive
  • Forbes

Tesla Stock At 40% Safety

A photo shows the logo on US electric carmaker Tesla's European headquarters in Amsterdam on May 2, ... More 2025. Tesla electric car sales in Europe plunged in the first three months of 2025, industry data shows. (Photo by Ramon van Flymen / ANP / AFP) / Netherlands OUT (Photo by RAMON VAN FLYMEN/ANP/AFP via Getty Images) If you believe in the Tesla (NASDAQ:TSLA) story, here is a clever trade you cannot miss - over 12% yield at 40% margin of safety, by selling Put Options. For long-term investors, who would love to own Tesla stock at a discount, this is a win-win trade. And why shouldn't they? After all, Tesla is building the most scalable clean energy and autonomy platform by combining electric vehicles, AI-driven robotics, and energy systems. The potential is massive! Here is the trade. Tesla stock is trading at about $343. You can sell a long-dated Put option expiring June 18, 2026, with a strike price of $200, and collect roughly $1,704 in premium per contract (each contract represents 100 shares). That's about an 8.5% yield on the $20,000 you're setting aside for the possibility of buying the stock. Plus, don't forget, this cash parked in a savings or money market account will earn an extra 4%. So we're talking about 12.5% yield overall. Separately, see Tesla Stock To $1,500 And here's the kicker. You're agreeing to buy Tesla at $200, a roughly 40% discount to the current market price, only if the stock drops below that level by the expiration date. Think that's too risky? Want a higher margin of safety - for example 50%? Use a $165 strike instead of $200 strike - your overall earnings will still be an impressive 9% instead of 12.5%, and you'll enjoy more peace. The strategy is reliable because large institutions have tested the strategy at scale, and for the right long-term investors, may be just right considering that Tesla dominates the clean energy market. As an aside, market leadership is in fact one of the factors we consider in constructing the market-beating Trefis High Quality portfolio (HQ) - a strategy of 30 stocks that targets long-term value creation. HQ has outperformed the S&P 500 and achieved returns greater than 91% since inception. Sure, I see the 12.5% return, however, what if Tesla drops more than 40%, isn't there some risk? Of course, there is risk. Because, there are two ways this could unfold: In short, you win either way, especially if you're comfortable owning a hyper focused and quality company with grand ambitions like Tesla for the long haul. It could very well be. If you do end up owning Tesla stock, you're not stuck with some speculative small-cap stock. You're holding a company that has: Sure, Tesla isn't your run-of-the-mill stock. Despite being a mega cap, it is surprisingly volatile. But that's exactly why you can get that 12.5% yield - you don't get those from duds. And perhaps you'd feel more comfortable when you consider this - every time Tesla falls, it creates a bottom, and that bottom level is going up each year. In 2022, when interest rates shot up and Musk liquidated a lot of Tesla stock to fund the Twitter acquisition, the price hit a low of $102. In 2024, that bottom was around $140 and in 2025, despite wild volatility in markets, Tesla hit a bottom of around $215. When you consider these levels, a 40% margin of safety of $200 strike, or 50% safety of $165 strike, do not sound like bad buy points. This trade offers an asymmetric risk-reward setup, with a built-in 40% discount. Either way, you come out ahead. These are the kinds of margin-of-safety setups and asymmetric risk-reward tradeoffs that we seek in the Trefis HQ portfolio, which is focused on long-term value creation. With a collection of 30 stocks, it has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Unusual Activity in Nvidia Put Options Ahead of Earnings - Are Investors Still Bullish?
Unusual Activity in Nvidia Put Options Ahead of Earnings - Are Investors Still Bullish?

Globe and Mail

time13-05-2025

  • Business
  • Globe and Mail

Unusual Activity in Nvidia Put Options Ahead of Earnings - Are Investors Still Bullish?

Today, a large volume of Nivida Inc (NVDA) put options have been trading in several near-the-money strike prices tranches. This shows investors are positioning ahead of the earnings release in two weeks. Some of these trades show bullish sentiment in NVDA stock with their high short-put yields. NVDA is up over 5% today at $129.85 per share, well up from its low on April 4 at $94.31, but still down from a Jan. 6 peak of $149.43. So, with this large number of NVDA put trades, are investors expecting a dip in the stock or another leg up? Unusual Put Option Activity in NVDA Today, a large number of NVDA put options traded in several at-the-money (ATM) and out-of-the-money (OTM) strike prices (expiring this Friday and one tranche for next Friday). This can be seen in today's Barchart Unusual Stock Options Activity Report. For example, the table above shows that over 43,200 puts were traded at the $126 strike price (May 16 expiry) - an amount that is 184x greater than the prior number of outstanding put contracts. This is indicative of a large set of institutional orders. The midpoint premium was 81 cents. That indicates that a short-put yield of 0.643% (i.e., $0.81/$126.00) for the next 3 days. On an annualized basis (assuming this can be repeated every week for a year, the expected return (ER) is 33.4% (i.e., 52 x 0.006428). The investor who shorted these puts would not be obligated to buy unless NVDA fell to $126, about 3% below today's trading price. Moreover, the breakeven point is $126-$0.81, or $125.19, or -3.588% below today's price. However, the variety of put tranches with large volumes seems to imply some sort of complicated trading or hedging strategy. The reason seems to involve a positioning ahead of the upcoming expected May 28 earnings release for the fiscal Q1 2026 quarter ending April 30. Nvidia's Expected Results Analysts expect to see revenue slightly higher than last quarter. For example, Seeking Alpha reports that Q1 revenue will be $43.05 billion, vs. $39.33 billion last quarter. Investors want to see that the company's AI-related revenue drivers are still growing. A lot of that sentiment will revolve around management's comments and guidance. For example, management guided last quarter that Q1 revenue will be $43 billion, plus or minus 2% (i.e., $42.14 billion to $43.86 billion). Drilling down, data center revenue, comprising the vast majority of its sales ($35.58b in Q4 or 82% of the total), due to its AI and cloud servers, jumped 18% Q/Q in Q4. With the China tariff war this past quarter, that growth may have slowed. Therefore, the market will be looking carefully at management comments and guidance, now that the tariff war has been paused for 90 days. More importantly, analysts will look at Nvidia's operating and free cash flow (FCF) production. That could affect the valuation for NVDA stock. For example, last quarter the company generated lower FCF ($15.5 billion vs. $16.787 billion in the prior quarter). This lower FCF was partly due to +32% higher capex spending ($1.077 billion vs. $813 million). However, its FCF margin (FCF/revenue) was 39.5% in Q4 vs. 47.9% in Q3, so the margin drop was not as much as expected. Analysts will be looking to see how much further the FCF margin falls if capex spending continues to increase faster than revenue growth. Target Prices for NVDA Stock Revenue forecasts from Seeking Alpha's survey of 57 analysts average $200.54 billion for the year ending Jan. 2026. That reflects a 53.7% increase over the year ending Jan. 2025 ($130.47 billion), but, more importantly, reflects a +27.5% increase over the run rate from Q4: $39.33b (Q4 2025) x 4 = $157.32b run rate revenue $200.54b/$157.32b -1= 1.275-1 = +27.5% increase In addition, assuming Nvidia can maintain at least a 39% FCF margin (i.e., vs. 39.5% in Q4 and 46.6% over the trailing 12 months): $200.54 billion est. FY 2026 revenue x 0.39 = $78.2 billion in FCF Using a 1.80% FCF yield metric, this implies Nvidia could be worth $4.344 trillion. $78.2 billion / 0.02 = $3,914 billion That is over $800 billion more than its present market cap of $3.19 trillion (i.e., +22.6%). In other words, NVDA could be worth +22.6% more or $159.20 per share. Analysts tend to agree. For example, Yahoo! Finance's survey shows that the average price target of 63 analysts is $163.03, and Barchart's survey shows a mean price of $166.10. Similarly, AnaChart shows that its survey of 34 analysts who've recently written on the stock has an average of $163.46 per share. The bottom line is that NVDA stock still looks undervalued here. So, no wonder a large number of options have traded today.

Timing your investments with the '15:50 trade'
Timing your investments with the '15:50 trade'

Yahoo

time09-05-2025

  • Business
  • Yahoo

Timing your investments with the '15:50 trade'

As corporate stock buybacks are on pace to ascend to a record high in 2025, it's time to start thinking how best to invest in the final minutes of the trading session with pinpoint accuracy. That's where the "15:50" trade comes in. Simpler Trading Senior Managing Director Chris Brecher explains the trading action that occurs from companies at 3:50 P.M., before the market close, and where it fits into the options trading landscape. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. Amid ongoing volatility, timing the market may be alluring, but it's not easy. Our next guest lays out an option strategy that uses timing to its advantage. Chris Butcher, Simple simpler trading, Senior Managing Director joining us now to discuss in the options playbook, sponsored by Tasty Trade. So, Chris, walk us through what you're thinking here on this trade because it takes advantage of some of the changing dynamics in market structure. Yeah, is uh, we've been using, we call it the 1550 trade because uh, companies can't buy back stock the last 10 minutes. So that's an SEC rule 10b-18. And the way we look at it is of like financial times just had an article about companies are going to go on a $500 billion buyback spree. And they can't. Usually companies in the S&P don't buy back stock five weeks prior to earnings. But for the first of the opening print and the last 10 minutes, they can't ever buy back stock. So a lot of times five weeks prior to earnings when you go in the blackout, the preponderance of stocks, I usually started with JP Morgan, which is usually was this time about April 14th. So you go into early, you know, late March, it means to us, not that the market's going to automatically go down because that's what a lot of people think with this kind of thing. Just means bad news and bad charts are more likely to work. And that's what we saw. I mean, you saw what happened. And once the preponderance of S&P stocks could buy back stock, the markets have held up great. So the whole point is, even if they have some lousy news, they're Teflon because they can buy back stock. But you can see the end of the day, almost every single day, uh, there's been great opportunities about shorting the markets the last 10 minutes. So we did like 15 minutes before. Uh, Chris, a different question for you now. You know, VIX still above 20 here, Chris. I'm just curious, what do you think it gets gets it back down to sort of pre-tariff levels? Call it low mid-teens. Yeah, that's a good question. Um, I think it stayed up because the realized volatility stayed up so much. So we like doing the 16 rule. So if you divide the VIX by 16, that's what market makers are expecting, like over a 1% move, uh, every day. And we've seen like a 1% move every day. If I'm right, uh, we've been showing a chart from a old stock market pro, uh, Justin Mamis of the sentiment cycle in markets on selloffs. And it's been adhering perfectly to it, where you get, uh, basically you get the the rally, you get the selloff and the consolidation, then you get the second leg, that's a panic sell off like you saw in April 2nd, you get the short squeezes, and then you get for weeks that futzes around, where you get a very tight range. And I think that tight range will be their realized volatility going down, and I think you'll get the uh, the VIX back to like 17. So I think when you get the expected move of the realized move every day of 1%, like today, I mean, if it stayed like this for two weeks, I think you'd see the VIX at 16 or 17. And so, and then that what levels are you watching for in the S&P 500 that would sort of go along with that? Um, right now, well, I'll tell you, I look at it, we we did a Google search, Yahoo search, either either. And of uh, yeah, I got to be careful there. But uh, when they basically threatened the tariffs with China of 10 to 20%, that was March 4th. So the first thing we're thinking is number one, the S&P on a daily chart, the 200 moving average is around 5,800. The March 4th statement was right around 5,800, and a lot of prior tops have been 5,800, and believe it or not, the prior bottom before the election, let me go to it and be sure I'm telling you the right thing, but I believe was, survey says, yeah, 5,800, the same thing. So that 5,800 is, I think, about it on the upside, because I don't understand if you say, well, China, uh, lowers tax, uh, the tariffs are going to go to 50, uh, 50%, that's still higher than March 4th. So it just seems there's so many reasons for the market to futz around in this area for weeks. And I think it's going to take a gradual uptrend, a tightening volatility to work off any kind of oversold MACD, because we look at oscillators of a weekly oscillator, but I think it that it'll take that to work off all the bearish sentiment. And you've seen it slowly get worked off, but it's taken a long time this time. Chris, just got a more general question for you. I'm just curious whether, you know, sort of the notable shifts you've seen, Chris, in tone, character, volumes, and options trading, give given all all the volatility we've been seeing. Um, well, we've seen a lot of the zero DTE, uh, stuff, which to me is more premium selling opportunities, but you can't premium sell the calls because you get these, we call, uh, so many people call them tape bombs, positive news out of nowhere, even when the markets look bad. So we've been doing a lot more limited risk like call flies or put flies. So our risk is limited, but if we're right that the expected move during the day starts to contract, we just try to take some money that way. We did that today, and we've done it most days. But I'm seeing a lot more gambler mentality with the zero DTEs, and overall, premium selling is the way I like doing it. So, but at the end of the day, yeah, we'll buy we'll buy cheap premium. That will do because of this lack of buybacks. Chris, always great to see you and have you on the show. Have a great weekend. Hey, you too. Thanks for having me on. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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