Thursday’s Vital Data: Exxon Mobil Corporation (XOM), Twitter Inc (TWTR) and Hewlett-Packard Company (HPQ)

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Stocks fell across the board on Wednesday, as plunging oil prices and troubles with Chinese markets plagued Wall Street. Losses could have been much worse, save for the release of July’s FOMC minutes, which analysts said indicated that the Fed may not be as set on an interest rate hike as previously thought. All in all, the S&P 500 recovered from the worst of Wednesday’s losses to end down 0.83%.

Amid the wave of selling pressure, option volume picked up the pace slightly on Wednesday, bouncing back from Tuesday’s anemic levels. With the bears leading the way, the CBOE’s single-session equity put/call volume ratio jumped to a one-week high of 0.81, while the 10-day moving average held at 0.75.

In stock options activity, a glut in global oil stockpiles has pressured many oil and energy sector stocks sharply lower this week, and options traders appear to be taking out their frustrations on Exxon Mobil Corporation (NYSE:XOM), which has seen a significant spike in put option volume lately.

Elsewhere, Twitter Inc (NYSE:TWTR) was once again hit with bearish analyst commentary after The Street’s Jim Cramer weighed in on one of his viewers’ most asked questions about the company. Finally, speculation ramped up on Hewlett-Packard Company (NYSE:HPQ) ahead of tonight’s quarterly earnings report.

08-20-2015 Top Ten Options

Exxon Mobil Corporation (XOM)

XOM stock tagged its lowest level since December 2011 on Wednesday, as oil and energy stocks plunged in tandem with oil futures. Oil prices dipped below $42 per barrel on Wednesday, with many analysts predicting sub-$40 oil just over the horizon. Driving Wednesday’ dive was the weekly EIA report on U.S. commercial crude inventories, which revealed that crude stockpiles are at seasonal levels not seen in the past 80 years.

Naturally, XOM options traders loaded up on puts. Overall, some 248,000 contracts traded on XOM, pushing the stock into a rare appearance on the top 10 most active options listing. Astonishingly, put volume accounted for 79% of Wednesday’s activity.  

Looking ahead to next week’s weekly August 28 series, options traders have focused heavily on the overhead $79 strike call, with open interest totaling 3,149 contracts, and the $74 strike put, with OI of 2,370 contracts.

Twitter Inc (TWTR)

TWTR stock headed back toward all-time lows on Wednesday, after the stock shed 2.47% in the wake of bearish commentary from The Street’s Jim Cramer. According to Cramer, one of the questions he gets asked most often is “When is X company going to buy Twitter?” Cramer said such a question would be understandable if Twitter was doing well, but the company is struggling.

“If you aren’t happy with the fundamentals, the odds are the acquirer you are dreaming of isn’t happy with the fundamentals either,” Cramer said.

Options traders responded to TWTR’s retreat with more mixed sentiment. On the day, some 206,700 contracts crossed the tape on TWTR, with calls accounting for only about 55% of this activity. Option levels to watch for next week include the weekly August 28 series $30 call, which sports OI of 5,479 contracts, and the $26 put, where 1,439 contracts are currently open.

Hewlett-Packard Company (HPQ)

HPQ stock was unable to resist broad-market selling on Wednesday, even with earnings looming large this afternoon. Shares shed 2.22% to dip below $28 and hit their lowest point since early January 2014.

For the record, Wall Street is looking for third-quarter earnings of 85 cents per share on revenue of $25.64 billion. EarningsWhisper.com reports a third-quarter whisper number of 86 cents per share.

Option volume was relatively positive for HPQ stock on Wednesday. Of the 139,061 contracts trading on the stock, 66% were of the call variety. Taking a closer look, peak August OI totals 44,720 contracts at the just out-of-the-money $27.50 put, while peak call OI for the series totals 16,801 contracts at the $30 strike. Remember, August options expire at the end of the week.

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/2015/08/thursdays-vital-data-exxon-mobil-corporation-xom-twitter-inc-twtr-hewlett-packard-company-hpq/.

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