Stocks are headed for a sharply lower open this morning, as sentient took a hit on Wall Street in the wake of the Panama papers scandal. Furthermore, falling oil prices, which are down again this morning, and concerns about negative interest rates are also plaguing the Street in early trading.
At last check, U.S. stock futures on the Dow Jones Industrial Average had shed 0.61%, with S&P 500 futures plunging 0.71% and Nasdaq Composite futures lower by 0.52%.
Options volume was brisk on Monday, but most of the activity was defensive, with ETFs stealing the limelight. On the CBOE, the single-session equity put/call volume ratio edged higher to 0.65, while the 10-day moving average remained rose to 0.71.
In equity options news, Apple Inc. (NASDAQ:AAPL) calls were bolstered by bullish comments at Credit Suisse, which boosted its price target on AAPL stock. Meanwhile, Facebook Inc (NASDAQ:FB) was hit with mixed commentary from analysts at Axiom and Deutsche Bank. Finally, Twitter Inc (NYSE:TWTR) soared on reports that MasterCard Inc (NYSE:MA) was interested in a partnership. TWTR is also rising in premarket trading on news that the company won the rights to stream Thursday night NFL games.
Apple Inc. (AAPL)
AAPL stock rose more than 1% on Monday, as traders feed off of bullish commentary from Credit Suisse. The brokerage firm lifted its price target on AAPL to $150 from $145 and added the stock to its U.S. focus list.
Overall, option volume was rather positive in Credit Suisse’s wake. Total volume on AAPL rose to 1.3 million shares, with calls accounting for 63% of the day’s take. However, there was a rather large block of 12,000 put contracts that traded on the Jan 2017 $80 strike — hinting at rather bearish expectations for Apple.
The potential for an AAPL decline is not out of the question, especially since the shares were unable to overtake resistance at their 200-day trendline yesterday.
Facebook Inc (FB)
Facebook saw a mixed bag of analyst commentary on Monday. On one hand, Axiom lifted its price target to $150 from $145, noting that Facebook had plenty of potential outside the social media market. On the other, Deutsche Bank believes that FB stock won’t break out to new highs until later this spring or summer, but noted that investors should buy weakness in the stock.
Calls were the dominant contract on Facebook stock yesterday. Overall volume rose to 972,000 contracts, with calls snapping up 64% of the day’s take. With the stock breaching its 10-day trendline and pulling back to test support at its 20-day, FB traders should keep a close eye on the $110 strike, which is currently home to 2,182 calls and 4,564 puts in the weekly April 8 series.
Twitter Inc (TWTR)
TWTR stock was hot yesterday, bucking the market downtrend to rally nearly 7% on the potential of a partnership with MasterCard. MasterCard is looking to find ways to expand its reach in social media, and played up the potential of Twitter’s “Buy Now” button.
In a separate report this morning, Twitter has won a contract with the NFL to stream Thursday night games online. Twitter out-bid Verizon Communications Inc. (NYSE:VZ), Yahoo! Inc. (NASDAQ:YHOO) and Amazon.com, Inc. (NASDAQ:AMZN).
Twitter options activity hit a near-term high on Monday, with volume surging to more than 400,000 contracts. Furthermore, call volume also hit a near-term high, accounting for more than 72% of the day’s take. For those looking to chase the bull on TWTR, the weekly April 8 series $17 and $17.50 call strikes are hotbeds of activity, with OI of 13,417 contracts and 5,815 contracts, respectively.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
