Monday’s Vital Data: Netflix, Inc. (NFLX), Tesla Motors Inc (TSLA) and Cisco Systems, Inc. (CSCO)

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Wall Street capped a volatile week of trading with a record-setting trading session on Friday. The major market indices finished broadly higher, with the S&P 500 setting a record high for the second straight session. On the week, the Dow Jones Industrial Average added 0.45%, the S&P 500 rose 0.31%, and the Nasdaq gained 0.9%. Options traders returned to their attention to calls, with the CBOE put/call volume ratio dipping to 0.56, while the 10-day moving average slipped to 0.62 — a three-week low.

Drilling down on Friday’s options activity, Netflix, Inc. (NASDAQ:NFLX) drew heavy call volume as the shares jumped 4.5% on news that the company was in talks to enter the Chinese online video market. Tesla Motors Inc (NASDAQ:TSLA) saw follow-through buying from last week’s positive legal news in Michigan bolstered by news of its first acquisition. Finally, Cisco Systems, Inc. (NASDAQ:CSCO) led the Dow higher as Wall Street finally digested the company’s recent quarterly earnings announcement.

Monday’s Vital Data: Netflix, Inc. (NFLX), Tesla Motors Inc (TSLA) and Cisco Systems, Inc. (CSCO)

Netflix, Inc. (NFLX)

NFLX shares surged 4.5% on Friday, closing the week out at an all-time high above $600 as news hit the Street that Netflix was in talks to enter the $6 billion Chinese online video market.  Netflix is reportedly in talks with Wasu Media Holding Co., a firm backed by Alibaba Group Holding Ltd. (NASDAQ:BABA) founder Jack Ma. Netflix spokesperson Anne Marie Squeo said in a statement that Netflix plans to be nearly global by the end of 2016.

Options trading volume spiked to a near-term high for NFLX on Friday, with 253,475 contracts changing hands on the session. Furthermore, 60% of Friday’s volume traded on the call side of the tape, hinting at rising expectations for the stock.

Looking at the week ahead, NFLX weekly May 22 options traders are currently focused on the in-the-money $610 call strike, where 1,039 contracts are currently open, as well as the 620 call, which sports open interest of 1,527 contracts. Peak open interest for the May 22 series, however, resides at the $600 strike, where 1,613 contracts are currently open.

Tesla Motors Inc (TSLA)

TSLA stock continued to see follow-through buying after news that the FTC had thrown in on its side of a legal debate in Michigan. Currently, Michigan bars direct manufacturer-to-consumer auto sales, which the FTC says hurts competition and consumers. Tesla also scored points with investors after media reports that the company acquired Michigan-based Riviera Tool LLC — a manufacturer of tools and dies involved in automotive manufacturing.

TSLA has been slow to move higher in the past few weeks, with the shares battling first resistance at $240 and now resistance near $250. Options traders appear to have hopes of an upside breakout, however, with 65% of Friday’s volume (142,402 contracts) crossing the tape as call options.

For the week, options traders have set their sites on the out-of-the-money weekly May 22 series $257.50 call, where 2,698 contracts currently reside. The overhead May $250 strike is also popular, with open interest totaling 2,215 contracts.

Cisco Systems, Inc. (CSCO)

Despite a lack of headline news on Friday, CSCO stock led the Dow closer to a record high on the session. Driven by what appears to be follow-through buying in the wake of Cisco’s solid quarterly earnings report, CSCO stock added 1.7% on Friday, pushing the stock closer to a showdown with round-number resistance in the $30 region. Call volume spiked on Friday, with these typically bullish bets accounting for 80% of the 139,766 CSCO options that crossed the tape on the session.

Short-term options traders appear to be betting on a breakout this week for CSCO. Open interest in the weekly May 22 series is heavily focused on the $29.50 through $30.50 strikes. Peak open interest totals 9,100 contracts at the May $29.50 strike, with 5,948 contracts at the $30 strike and 2,878 contracts at the $30.50 strike.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/05/mondays-vital-data-netflix-inc-nflx-tesla-motors-inc-tsla-cisco-systems-inc-csco-options/.

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