Tuesday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Twitter Inc (TWTR)

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U.S. stock futures are up big in Tuesday’s premarket trading, as stocks are banking on a rally in crude oil; in late overseas trading, the front-month crude contract was up about 2% near $37 per barrel. Additionally, Wall Street is preparing for an expected Fed rate hike when the Federal Open Market Committee ends its two-day meeting tomorrow.

At last check, U.S. stock futures on the Dow Jones Industrial Average were up 0.83%, while futures on the S&P 500 were up 0.8%, and the Nasdaq Composite was lagging with a gain of 0.58%.

Options activity remained brisk on Monday, with volume coming in well above the average for the past two weeks. Over on the CBOE, call volume surged, driving the single-session equity put/call volume ratio to a two month low of 0.57. The 10-day moving average was unfazed, however, holding firm at 0.75.

Looking at equity options activity, Bank of America Corp (NYSE:BAC) saw a flood of options activity on Monday after news hit that the Fed has approved the company’s revised capital plan. Elsewhere, iPhone sales estimates continue to fall for Apple Inc. (NASDAQ:AAPL), with Barlcays cutting its price target on AAPL stock as a result. Finally, the exodus continues at Twitter Inc (NYSE:TWTR), as Mike Davidson, vice president of design, tweeted on Monday that he was leaving the company.

Tuesday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Twitter Inc (TWTR)

Bank of America Corp (BAC)

Bank of America shares saw considerable option volume on Monday, with nearly 1.86 million contracts changing hands on the banking giant. Traders were in a bullish mood, it would seem, as calls accounted for 63% of BAC stock’s total volume on the day.

Helping to drive activity was news that the Fed has approved BofA’s new plan for building reserve capital. BAC passed its annual stress test in March, but the Fed was concerns about weakness in the capital plan for risk and losses, ultimately limiting Bank of America’s ability to raise dividends and buy back stock. The new plan clears the way for BofA.

Turning to short-term options activity, BAC stock is headed for a showdown today, with significant accumulations of puts and calls at the Dec $17 strike. Currently, 146,646 calls and 78,047 puts reside at this near-the-money strike. Additionally, BAC traders will want to keep a close eye on the $18 strike, as nearly double the OI of both puts and calls are currently perched here.

Apple Inc. (AAPL)

The past couple of weeks have been a bit rough for Apple. Analysts have begun to heavily scrutinize iPhone unit sales, and they don’t like what they see. Yesterday, Barclays joined the growing bearish contingent, cutting its price target on AAPL stock to $150 from $155 and lowering its iPhone unit estimates for March to 57 million for 60.5 million.

On Friday, JPMorgan analysts warned that weak November iPhone unit sales could extend into the first quarter of 2016.

Options volume remained hot and heavy for AAPL stock on Monday, topping out at roughly 1.5 million contracts. Calls, while still the most popular of AAPL options, declined to account for just 57% of the day’s total activity.

Looking at December options, AAPL is dangerously close to breaching technical support at $110, which is home to some 43,000 puts and 22,892 calls in the monthly series. Below $110, there are 10,874 puts at $109 and 25,084 puts at the $105 strike. While AAPL seems unlikely to test $105, a drop below $109 before Friday’s expiration would be a major coup for bearish options traders.

Twitter Inc (TWTR)

Twitter continues to shed executives on a regular basis. On Monday, VP of Design Mike Davidson tweeted that he was stepping down after three-plus years of leading the design team.  Among the feathers in Davidson’s hat while at Twitter was the Moments, a feature for aggregating Tweets from live and breaking events.

Options volume for TWTR stock came in just above average on Monday, with about 170,340 contracts changing hands. Calls were tops on the session, accounting for 67% of the take, as options traders took Davidson’s resignation in stride. As for December OI, TWTR is currently pinned at the $25 strike, which is home to peak call OI (18,438 contracts) and put OI (17,985) contracts for the series.

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/2015/12/tuesdays-vital-data-bank-america-corp-bac-apple-inc-aapl-twitter-inc-twtr-options/.

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