Wall Street is headed for a positive start this morning, with the Dow Jones Industrial Average looking to put some distance between it and the 18,000 mark. Traders are also weighing their options in the oil pits, as crude appears to have stabilized above $40 per barrel.
Heading into the open, U.S. stock futures on the Dow have added 0.32%, while S&P 500 futures are up 0.5% and Nasdaq Composite futures have gained 0.74%.
Options volume remained well above average on Monday, with puts slightly more popular at the start of the week. The CBOE single-session equity put/call volume ratio rose to 0.69 from Friday’s weekly low of 0.63, though the 10-day moving average remained unmoved for the fifth-consecutive session at 0.67.
In equity options news, call volume faltered on Apple Inc. (NASDAQ:AAPL), as market research group TrendForce raised questions about first-quarter iPhone sales. Elsewhere, Netflix, Inc. (NASDAQ:NFLX) saw put volume rise in early profit taking ahead of last night’s quarterly earnings report. Finally, Walt Disney Co (NYSE:DIS) calls soared after DIS stock was upgraded to “buy” from “hold.”
Apple Inc. (AAPL)
Call volume remained uncharacteristically below average for Apple on Monday, despite the company’s upcoming quarterly earnings report. Sapping the wind out of Apple’s typical bullish sentiment backdrop was a report from TrendForce stating that iPhone shipments may have fallen 45% year-over-year in the first-quarter, with the lackluster iPhone 6s getting most of the blame for the poor comparisons.
Overall, option volume was down from Friday’s breakneck pace, but still well above the norm for AAPL stock. Roughly 1.6 million contracts traded on AAPL, with calls only eking out 56% of the take.
Looking ahead to weekly April 29 series open interest, the $110 strike remains the centerpoint of speculation, with 65,000 calls and 59,000 puts in residence. Meanwhile, the $120 call strike is gaining attention, with OI totaling 14,000 contracts.
Netflix, Inc. (NFLX)
Early profit taking plagued NFLX stock on Monday, with the shares dipping nearly 3% on the day. NFLX puts were also in demand, racking up 51% of the day’s total volume of 737,000 contracts. Traders should expect more NFLX put volume today, as the stock is down more than 8.5% in premarket trading, despite Netflix’s solid first-quarter earnings report.
Should NFLX’s premarket selloff follow through into the open, the weekly April 22 series $100 put is poised to trade in the money. Currently, more than 11,000 put contracts are open at this weekly strike, which closed at $2.45, or $245 per contract, last night. Call OI at the $100 strike is thin, however, with only about 1,900 contracts.
Walt Disney Co (DIS)
DIS stock jumped nearly 3% on Monday, after Pivotal Research upgraded Disney to “buy” from “hold” with a $121 price target. The move prompted a flood of call volume, as DIS logged its first daily close north of $100 since mid-January.
Options traders were quick to pounce on the move, sending more than 176,000 contracts across the tape on DIS stock. Calls accounted for a hefty 73% of the day’s take.
Taking a closer look at the weekly April 22 series reveals nearly 2,300 calls open at the overhead $102 strike, while put OI at the $101 strike has risen to more than 4,000 contracts.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
