Stocks traded flat to lower on Friday, with the major market indices ending the week on a slightly sour note. The S&P 500 ended its three-week winning streak, closing south of 2,100 on a weekly basis for the first time since since mid-April. Meanwhile, activity in the options pits held steady on Friday, with the CBOE put/call volume ratio holding at 0.61. The 10-day moving average dipped to 0.61.
In equity news, Apple Inc. (NASDAQ:AAPL) traders made their final preparations for this week’s WWDC 2015, where Apple is supposed to take the wraps off services including Apple Pay in the U.K. and the Apple Music streaming service. Elsewhere, Netflix, Inc. (NASDAQ:NFLX) traders are starting to fret over indications that Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) may be debating a Netflix-like movie streaming service.
Finally, Alibaba Group Holding Ltd (NYSE:BABA) is reportedly looking to take on Google and Amazon.com, Inc. (NASDAQ:AMZN) by expanding Alibaba cloud services outside of China.
Let’s take a closer look at the headlines and movements in each of these stocks:
Apple Inc. (AAPL)
The Apple Worldwide Developers Conference (WWDC) 2015 kicks off today, and Wall Street will be closely scrutinizing every piece of punctuation flowing from the conference. Analysts and speculators have long debated what new services and devices upgrades will be announced this week, with the most popular rumors stating that Apple will launch Apple Pay in the U.K., as well as the Apple Music streaming service. Music labels have reportedly not signed off on the music service as of yet, though rumors have the service costing $10 per month, with artists being paid differently on whether their songs are streamed or downloaded.
AAPL stock has held close to support/resistance in the $130 region for the better part of the past three weeks, allowing options traders to shore up their positions in the region. Volume picked up on Friday for AAPL, with the 763,581 contracts changing hands pulling closer to the stock’s average daily trading volume. Calls remained the option of choice on Friday, with 58% of the day’s volume crossing on the call side.
Looking at weekly June 12 series open interest (OI), the out-of-the-money $133 strike is the most popular, with 49,260 contracts currently in residence. Following at a distant second is the in-the-money $128 call, where 23,978 contracts are open. Peak put open interest, meanwhile, totals 13,360 contracts at the out-of-the-money $125 strike.
Alibaba Group Holding Ltd (BABA)
Alibaba has been busy this year, entering into a slew of cloud partnerships with the goal of launching its Marketplace Alliance Program (MAP). Among the most notable of BABA’s deals was one with Intel Corporation (NASDAQ:INTC) to strengthen Alibaba’s cloud computing services. The move is a direct challenge to similar cloud services offerings from Google and Amazon.com.
Volume was lighter than usual for BABA on Friday, with only about 128,734 contracts changing hands. That said, calls were still the most popular contracts by far, comprising 66% of Friday’s total volume. Looking at weekly June 12 series OI, peak open interest totals 11,325 contracts at the overhead $92 strike, while the $93 strike arrives at a distant second in terms of popularity, sporting OI of only 3,351 contracts.
Netflix Inc. (NFLX)
Highflying NFLX stock was shocked a bit last week, as reports hit the Street that Google might be considering offering an online movie streaming service. According to reports, a survey is making the rounds that is looking to gauge interest in a “Google Monthly Movie Pass.” While the survey is only being reported by a few users taking part in a Google Opinion Rewards survey, NFLX stock traders will be keeping a close eye on this potential headwind.
On the options front, speculation was enough to push NFLX stock onto Friday’s top 10 most active options listing. Overall, 110,133 NFLX options contracts traded on Friday, with about 58% of the day’s volume crossing the tape as calls. Looking at NFLX OI for the weekly June 12 series, traders are currently zeroed in on the overhead $635, $640 and $650 strikes, where call contracts number between roughly 1,100 and 1,700. On the put side, the out-of-the-money $620 strike is king, with 1,393 contracts in residence.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
