Stocks extended their gains on Wednesday, as Wall Street found strength ahead of the release of key U.S. economic reports. Due out this morning are data on U.S. second-quarter GDP and weekly jobless claims. For Wednesday, the S&P 500 added 0.74%, and the index looks to end the week in positive territory.
Options activity treaded water on Wednesday, with the CBOE’s single-session equity put/call volume ratio parking at 0.62 for a second session. The 10-day moving average pulled back from a one-week high to perch at 0.67.
In equity news, Facebook Inc (NASDAQ:FB) stock is trading roughly 2% lower pre-market despite a strong second-quarter showing. Pfizer Inc. (NYSE:PFE) shares were call-heavy in the options pits on Wednesday, as traders cheered better-than-expected earnings. Finally, Gilead Sciences, Inc. (NASDAQ:GILD) was also popular among call traders following strong second-quarter results.
Facebook Inc (FB)
Facebook revenue topped the $4 billion mark for the first time ever in the second quarter. Coming in at $4.04 billion, revenue topped the consensus estimate for $3.99 billion. Facebook also bested the Street’s earnings expectations, reporting a profit of 50 cents per share, north of targets for 47 cents.
Despite the solid figures, FB stock is trading more than 2% lower heading into the open. With the shares rallying hard into last night’s report, FB could be seeing sell-the-news activity.
Options activity was brisk on FB stock on Wednesday. Nearly 1 million contracts changed hands on the equity, with calls accounting for 67% of the day’s activity. With FB hovering just south of $95 ahead of the open, the 13,000 contracts at the weekly July 31 series $95 put are poised to trade in the money this morning. Meanwhile, peak call open interest of 33,308 contracts at the July 31 $95 strike are on the verge of finishing out of the money.
Pfizer Inc. (PFE)
PFE stock rallied more than 1% on Wednesday, and options activity on the shares followed suit. A record 174,187 contracts traded on PFE, with calls dominating the overall activity by snatching up 73% of the take. With PFE trading just shy of $36, the more than 2,700 call contracts at the July 31 $35.50, $35 and $34.50 strikes are all trading firmly in the money with less than 48 hours until expiration.
Driving PFE options activity, Pfizer reported second-quarter earnings of 56 cents per share on revenue of $11.9 billion. Wall Street had been looking for earnings of 52 cents per share on revenue of $11.4 billion. Furthermore, Pfizer saw a 25% jump in cancer drug sales and better-than-expected revenue of $1.5 billion for its newest drug, Prevnar.
Gilead Sciences, Inc. (GILD)
Also in the pharmaceutical sector, Gilead Sciences reported Street-beating second quarter results while lifting its fiscal 2015 sales guidance. For the full year, Gilead now sees sales of $29 to $30 billion, marking the second consecutive quarter that the company has lifted its sales guidance by $1 billion.
By the numbers, Gilead reported earnings of $3.15 per share, 44 cents better than expected, on revenue of $8.2 billion, $590 million above expectations.
Options volume remained elevated on GILD stock, with 142,559 contracts crossing the tape on the equity. Calls were also the dominant contract, accounting for 71% of the day’s activity. Overall, GILD’s total put/call open interest ratio currently rests at 0.63, with calls nearly doubling puts among all open interest on the stock.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
