The major market indices traded flat on Thursday, as Wall Street held its breath ahead of today’s September payroll report. This key jobs data could provide insight into how soon the Fed will raise interest rates after maintaining a holding pattern last month.
On the day, the Dow Jones Industrial Average slipped 0.08%, while the S&P 500 rose 0.2%.
Turning to options activity, volume continued to hold firm with the past month’s average, with calls still maintaining a bit of an edge. On the CBOE, the single-session equity put/call volume ratio rose to 0.73, while the 10-day moving average held at 0.78 for the fourth session in a row.
Taking a closer look at equity options activity, Facebook Inc (NASDAQ:FB) calls gained traction on Thursday after Wedbush resumed coverage on several social media stocks, issuing a “buy” rating for FB. Elsewhere, Twitter Inc (NYSE:TWTR) calls were active despite a negative reaction to acting CEO Jack Dorsey being named the company’s new permanent CEO. Finally, JPMorgan Chase & Co. (NYSE:JPM) also was popular with call traders after being cut to “buy” from “strong buy” at Vetr.
Facebook Inc (FB)
Analysts at Wedbush weighed in on a trio of social media stocks on Thursday, including issuing a “neutral” rating on LinkedIn Corp (NYSE:LNKD) and TWTR, and a “buy” rating for FB stock. Wedbush also placed a 12-month price target of $115 on FB shares. According to Thomson/First Call, FB currently sports a consensus price target of $110 per share as well as 47 “buy” ratings, four “holds” and one “sell” rating.
FB options activity was brisk on Thursday, with 193,088 contracts changing hands on the equity. What’s more, calls dominated Facebook activity yesterday, accounting for nearly 60% of the day’s take. Looking at today’s trading, FB is currently perched north of peak weekly Oct 2 series call open interest, totaling 16,152 contracts at the $90 strike. However, there could still be turbulence at $93, where call OI totals 13,401 contracts.
Twitter Inc (TWTR)
While Twitter stockholders were okay with Jack Dorsey as interim CEO, they are apparently pretty set against Dorsey as a permanent fixture in the position. After Twitter’s board announced that Dorsey would remain as CEO officially, TWTR stock plunged more than 8%. Adding to TWTR’s woes, Wedbush issued a “neutral” rating on the shares with a $30 price target.
Thursday’s options activity on TWTR was either bullish, or the sign of shorts protecting freshly initiated positions. Call volume swelled on the stock, accounting for 65% of the 142,150 contracts changing hands yesterday. Twitter is currently staring up at heavy open interest at $25 in the weekly Oct 2 series, with 5,411 calls and 4,973 puts open at this strike. With technical resistance in the region too, TWTR stock could be pinned near $25 at the close of today’s trading.
JPMorgan Chase & Co. (JPM)
JPM stock joined a parade of analyst ratings and reiterations on Thursday, and appeared to come out pretty much unscathed. Brokerage firm Vetr dropped JPM a notch from “strong buy” to “buy,” maintaining a $68.04 price target on the stock. Overall, the shares have garnered 24 “buy” ratings and seven “holds” with a 12-month consensus price target of $75 per share.
JPM stock edged higher following the cut, with the stock rebounding off technical support in the $60 region. This area is a pivot point for JPM, with a breach of $60 potentially confirming a longer-term downtrend.
Options traders were call heavy on JPM on Thursday. These typically bullish bets accounted for a whopping 83% of JPM’s total option volume of 104,882 contracts yesterday. As for today’s trading, JPM is perched well below peak weekly Oct 2 series OI levels, with 11,606 calls and 11,485 puts currently open at the $65 strike. More immediate OI concerns lay at $61.50, where 5,063 call contracts reside, and could create some turbulence near the close this afternoon.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
