Thursday’s Vital Data: Netflix, Inc. (NFLX), Ford Motor Company (F), General Motors Company (GM) and JD.Com Inc(ADR) (JD)

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Hang onto your hats, as stocks are poised for another plunge this morning.

U.S. stock futures are trading sharply lower again this morning after trading in China was halted yet again, leading to the shortest trading day for Chinese equities. Pouring oil on the fire, crude futures are off more than 4% this morning, trading at a 12-year low near $32.50 per barrel.

Heading into the open, futures on the Dow Jones Industrial Average are off 2.23%, S&P 500 futures are down 2.25%, and Nasdaq Composite futures have plunged 2.9%.

Equity options activity slipped a bit on Wednesday, but volume still arrived within reach of average as traders continued to play defensively amid volatile market conditions. Over on the CBOE, puts continued to grow in popularity, as the exchanges single-session equity put/call volume ratio rose to 0.7, pulling the 10-day moving average higher to 0.69.

Turning to news driving equity option activity, Netflix, Inc. (NASDAQ:NFLX) not only bucked yesterday’s selloff, the stock surged more than 9% after announcing it was expanding its streaming service into 130 new countries. Meanwhile, Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) both saw record options activity after reporting record auto sales for 2015. Finally, options traders caught up with China-based JD.com Inc(ADR) (NASDAQ:JD) on Wednesday, clambering for positions as China stocks continue to tank.

Thursday’s Vital Data: Netflix, Inc. (NFLX), Ford Motor Company (F), General Motors Company (GM) and JD.Com Inc(ADR) (JD)

Netflix, Inc. (NFLX)

Netflix blew away the audience at the Consumer Electronics Show on Wednesday, announcing that its streaming service would be available in 130 new countries. NFLX is now available in 190 countries, or roughly two-thirds of the world’s online population. China, however, was notably absent from the list.

Volume spike to record levels for NFLX in Wednesday’s options trading. More than 562,000 contracts changed hands on the stock, with calls garnering 59% of the take. The jump in call volume was particularly notable, since the percentage of calls in Netflix’s daily volume typically doesn’t exceed 50% due to the stock’s bearish sentiment backdrop.

Looking ahead to January option expiration, NFLX stock is currently hovering just above $115 in premarket trading, meaning that the 1,736 calls and the 1,618 puts open at the Jan $115 strike are currently in focus. NFLX also has some 8,232 calls at the overhead $120 strike, while significant put support could emerge at $110, where 11,581 put contracts currently reside.

Ford Motor Company (F) and General Motors Company (GM)

Both Ford and General Motors made Wednesday’s top 10 most active options listing, as U.S. automakers put in record sales in 2015. Driven by low interest rates, a recovering economy, and sub-$2-per-gallon gasoline, GM saw total sales rise 5% year-over-year, while Ford sales jumped 5.3%. As a result, many analysts have upwardly revised their 2016 outlooks for unit sales at both companies.

In the options pits, F options were considerably more popular, with 242,000 contracts changing hands, versus roughly 196,000 for GM. Additionally, Ford traders appeared more optimistic, with calls raking 68% of the take, compared to 55% for GM call options.

Taking a look at key levels for January expiration, peak call (195,209 contracts) and put (118,083 contracts) for F rest at the $17 and $15 strikes, respectively. However, with both strikes well overhead, focus will likely turn to the $13 call strike (54,826 contracts) and the $12 put strike (31,592 contracts).

As for General Motors, the Jan $30 strike put is where it’s at, with 109,341 contracts currently in residence. GM has not traded south of $30 since September, and a breach here could be especially damaging for the stock.

JD.com Inc. (JD)

It’s no secret that Chinese stocks are taking a beating this week.  Chinese investors have finally had enough of weak economic reports, sending the country’s equities deep into the red. JD.com has been no exception, though options traders have been a bit slow to pile into JD options on Wall Street.

That all changed on Wednesday, with volume spiking to a record 215,928 contracts for JD.  Surprisingly, calls were the most active, accounting for 59% of all of Wednesday’s volume.  Looking at January OI, JD is trading south of peak put and call OI at the $30 strike, leaving little in the way of potential put support south of the shares. With heavy call OI above, JD’s short-term outlook is quite bearish.

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/2016/01/thursdays-vital-data-netflix-inc-nflx-ford-motor-co-f-general-motors-company-gm-jd-com-inc-jd-options/.

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