Tuesday’s Vital Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Exxon Mobil Corporation (XOM)

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Selling continued unabated Monday, with the Dow Jones Industrial Average plummeting more than 1,000 points on the open. Wall Street largely recovered from the worst of the China-induces selloff by the close, but stocks ended down nearly 4% across the board. Heading into the open morning, though, U.S. stock futures are poised for a bounce, up roughly 3.4% in premarket trading.

Volume remained brisk in the options pits for a second session in a row on Monday, arriving just shy of Friday’s near-term peak. Overall, the CBOE’s single-session equity put/call volume ratio retreated from Friday’s annual high to perch at 0.87. The 10-day moving average, meanwhile, continued into annual high territory with a reading of 0.79.  

On the equity options front, Apple Inc. (NASDAQ:AAPL) puts remained popular despite CEO Tim Cook’s reassurance that China represents a solid growth opportunity. Elsewhere, Netflix, Inc. (NASDAQ:NFLX) signed a content distribution deal with Softbank Corp. (OTCMKTS:SFTBY) in Japan, while Exxon Mobil Corporation (NYSE:XOM) is on pace to post its worst annual performance in 34 years.

08-25-2015 Top Ten Options

Apple Inc. (AAPL)

Despite finishing down 2.5% on the day, AAPL stock helped to lead the rebound on the Dow after CEO Tim Cook sent an optimistic email to CNBC’s Jim Cramer. According the email, Cook said, “I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low and most importantly the growth of the middle class over the next several years will be huge.” With AAPL stock leading the way, Wall Street recovered from the worst of Monday’s China-driven losses.

The email failed to inspire bullish sentiment within the options community, however.  While volume swelled to 1.8 million contracts for AAPL stock, options traders were put heavy on the media darling, with these typically bearish bets accounting for 51% of the day’s take.

Looking at weekly Aug 28 series open interest, options traders are currently focused on the $80 and $85 put strikes, which sport OI of 14,285 contracts and 23,683 contracts, respectively. Furthermore, the $70 strike put (7,773 contracts) and the $75 strike put (9,516 contracts) have also gained a considerable following.

In premarket trading, AAPL stock was last seen up 5.8% at $109.11.

Netflix, Inc. (NFLX)

NFLX stock also is rebounding in premarket trading, gaining roughly 8.5% to trade at $105.27 after plunging nearly 7% on Monday. Yesterday, Netflix announced it had struck a major content sharing deal with Japanese telecom and Internet service provider Softbank Corp. The deal sets Netflix’s debut in Japan for Sept. 2, as the company continues on its plan to expand global service to 200 countries by the end of 2016.

Regardless of the news, puts remained popular on NFLX amid the market selloff.  Volume rose to 319,875 contracts, with puts accounting for 54% of the day’s activity. For the weekly Aug 28 series, traders have shifted their attention to the $90 and $95 strike puts, which sport OI of 1,341 contracts and 2,027 contracts, respectively, with another 4,311 contracts at the $100 strike put.

With NFLX up sharply in premarket trading, the smart money might have sold these strikes in anticipation of a rebound from yesterday’s lows.

Exxon Mobil Corporation (XOM)

Exxon once again found itself at the center of the energy sector storm on Monday. XOM stock plunged nearly 5% on the day, though premarket trading has the shares up 3.3% at $71 at last check. Still, media reports have XOM on pace to log its worst annual performance since 1981, with shares off nearly 26% year-to-date.

As for the energy sector as a whole, Morningstar analyst Mark Hanson said “it’s a bloodbath” as oil closed below $40 per barrel for the first time since 2009.

Naturally, XOM’s options activity was dominated by puts on Monday. Overall volume came in at a brisk 228,475 contracts, with puts accounting for 61% of the day’s take. Peak weekly August 28 series put OI for XOM currently rests at the $74 strike, totaling 2,614 contracts, while another 2,142 puts are also open at the $72.50 strike. Both contracts are currently trading comfortably in the money.

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/tuesdays-vital-data-apple-inc-aapl-netflix-inc-nflx-exxon-mobil-corporation-xom-options/.

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