Stocks traded lightly on Thursday, as Wall Street remained wary ahead of this morning’s key August non-farms payroll report. According to most analysts, the strength (or lack thereof) of this jobs report could determine whether the Fed raises interest rates at its monetary policy meeting this month. On the day, the Nasdaq Composite bore the worst of the selling, dipping 0.35%.
Elsewhere, sentiment continued to improve among options traders, as call volume crept back into Thursday’s activity. Overall, the CBOE’s single-session equity put/call volume ratio extended Wednesday’s decline to arrive at 0.68. The 10-day moving average followed suit, dipping to a one-week low of 0.78.
Speaking of equity options activity, analysts at Oppenheimer offered up their predictions for new product launches at Apple Inc.’s (NASDAQ:AAPL) Sept. 9 press event. Meanwhile, Intel Corporation (NASDAQ:INTC) announced that it was investing $50 million in QuTech to accelerate quantum computing research. Finally, Canaccord Genuity cut its price target on Twitter Inc (NYSE:TWTR) due to slowing user growth.
Apple Inc. (AAPL)
Apple’s “next big thing” is expected to arrive on Sept. 9 at the company’s latest press conference. But big things come in many sizes, and Oppenheimer doesn’t sound all that enthused about the latest potential developments. According to the brokerage firm, Apple will likely roll out the iPhone 6s, with image sensors being the “brightest spot among all upcoming improvements.” Oppenheimer also expects an Apple TV upgrade and more details on iOS 9. All in all, the brokerage firm called the prospects for the event “underwhelming,” but remained overall bullish on AAPL stock.
AAPL options traders are also feeling a bit underwhelmed lately. Volume once again dipped below historic averages on Thursday, with only about 742,645 contracts changing hands. Furthermore, volume was almost evenly split between calls and puts on the day, eschewing AAPL’s typical call-heavy backdrop.
Looking ahead to next week’s weekly Sep 11 series of options, open interest is indicating a wide range of expectations. Specifically, peak call open interest for the series totals 22,722 contracts at the deep out-of-the-money $120 strike, while another 14,260 calls are open at the $115 strike. This activity appears to be related to a call ratio spread that would benefit most from a rally up to $120. Meanwhile, peak put open interest totals 10,905 contracts at the near-the-money $109 strike.
Intel Corporation (INTC)
INTC stock has been hanging around near the bottom of the top ten most active options listing for the better part of the past week. The shares have recently rebounded from long-term support near $25, only to be capped by resistance at their 10-week moving average. In Thursday’s activity, INTC was bolstered by news that Intel initiated a 10-year, $50 million, investment in QuTech to pursue acceleration in developing quantum computing.
In the options pits, INTC saw volume rise to 120,317 contracts, with calls edging out puts by snapping up 53% of the days take. In weekly Sep 11 series action, the out-of-the-money $31 strike has claimed top honors by collecting open interest of 25,927 contracts. Peak put open interest for the series pales in comparison, totaling just 2,434 contracts at the int-the-money $29 strike.
Twitter Inc (TWTR)
Twitter recieved a bit of a mixed message from analysts at Canaccord Genuity on Thursday. The brokerage firm cut its price target on TWTR stock from $45 to $40 citing the fact that annual user growth has slowed from 100% in 2012 to just 20% in the first quarter of 2015. However, Canaccord held its “buy” rating for the stock, noting that Twitter’s integration with Google Inc.’s (NASDAQ:GOOGL) search engine was a positive for the company.
As for options activity, TWTR saw 116,153 contracts trade on Thursday, coming in just below the stock’s average for the past month. Call activity, however, was surprisingly above normal despite the target cut. In fact, 73% of Thursday’s activity was of the call variety, though whether these calls were bought, sold, or used to hedge new short positions remains to be seen.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
