Friday’s Vital Data: Apple Inc. (AAPL), Freeport-McMoRan Inc (FCX) and Yahoo! Inc. (YHOO)

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Wall Street looked nervous this morning, as traders awaited the arrival of January’s nonfarm payrolls report. Economists expect that roughly 180,000 jobs were added in January, down from 292,000 in December. The report could give Wall Street some insight as to whether the Fed will continue to raise rates this year.

As for U.S. stock futures, Nasdaq Composite were last seen 0.25% higher, while futures on both the Dow Jones Industrial Average and S&P 500 were down about 0.2%.

Option volume was brisk on Thursday due to last-minute positioning ahead of jobs data and the expiration of weekly February 5 series options. On the CBOE, the single-session equity put/call volume ratio retreated from yesterday’s three-week high to arrive at 0.75. Meanwhile, the 10-day moving average appears to have put in a bottom, rebounding to come in at 0.68.

On the equity option news front, Apple Inc. (NASDAQ:AAPL) saw mixed activity after losing a $625.6 million patent lawsuit to VirnetX Holding Corporation (NYSE:VHC).  Elsewhere, Freeport-McMoRan Inc. (NYSE:FCX) surged nearly 18% as metals prices continued to rally on a weakening U.S. dollar. Finally, Yahoo! Inc. (NASDAQ:YHOO) jumped more than 5% after Citigroup upgraded YHOO stock in the wake of Yahoo’s recent quarterly earnings report.

02-05-2016 Top Ten Options

Apple Inc. (AAPL)

Nevada-based VirnetX makes its living by buying up patents and intellectual property and then licensing those patents or suing those who violate them. The company just won a retrial of a 2012 patent case for Facetime and iMessage — two core applications on Apple iPhones and iPads. VHC stock rocketed on the news, while AAPL declined, but the situation may be short-lived, as Apple plans on appealing the case.

The case may not have any real lasting effect on AAPL stock, but the impact to sentiment among options traders was palpable. On Thursday, AAPL volume came in at an above-average 1.1 million contracts, with call volume as a percentage of total volume dropping to just 58%. AAPL call volume typically makes up about 61% to 62% of daily traffic.

Weekly February 5 series options expire at the close today, and AAPL stock could see some relief heading into next week. The shares are staring up at some 15,000, 12,000 and 13,000 contracts at the $17. $17.50, and $18 strikes, respectively. AAPL is trending higher in premarket trading, and a strong jobs report today could give traders the impetus they need to push AAPL through these layers of resistance by the close.

Freeport-McMoRan Inc. (FCX)

Hurt by a weak global economy, slackening demand, and a strong U.S. dollar, metals and precious metals have been beaten to a pulp during the past several months. The situation has begun to ease a bit in the past week, however, and copper prices, in particular, surged more than 2% on Thursday. The result was a spike for mining stocks, with Freeport stock surging nearly 18% to lead the way.

Options activity for FCX stock was quite brisk on Thursday, with the shares seeing record short-term volume of more than 408,000 contracts. Calls were the speculators’ soup de jour, accounting for 64% of total volume.

With FCX trading just shy of $6, the shares have pushed past nearly all major call open interest strikes for the weekly February 5 series. Only the $6 strike remains, with 3,270 contracts looming just overhead to provide a bit of pushback in today’s trading.

Yahoo! Inc. (YHOO)

YHOO stock has been a speculator’s dream this week. In its quarterly earnings report, Yahoo! expressed its desire to seek strategic alternatives, including the spinoff or sale of its online holdings and the shedding of some 1,700 jobs. As a result, Citigroup upgraded YHOO stock to “buy” from “hold” while increasing its price target from $31 to $32 per share.

Options activity has run rampant on YHOO stock this week. Yesterday, the shares saw more than 386,000 contracts change hands, with puts snapping up 63% of the take. While these bets may very well be looking for a reversal in YHOO stock, this rise in put activity could also signal hedges for new long stock positions – i.e. married puts.

Looking at weekly February 5 series OI, YHOO is facing two rather stiff overhead hurdles in today’s trading. The $29.50 and $30 strikes sport OI of roughly 5,300 contracts and 6,300 contracts, respectively. The situation eases in the weekly February 12 series, but expect YHOO stock to remain under pressure despite the Citigroup upgrade.

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/2016/02/thursdays-vital-data-apple-inc-aapl-freeport-mcmoran-inc-fcx-yahoo-inc-yhoo/.

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