Wall Street is shaking off weakness in Asian trading to edge its way higher in premarket trading this morning. Manufacturing data will be front and center today, with April’s Institute for Supply Management data and March construction spending figures set for release later this morning.
Heading into the open, U.S. stock futures on the Dow Jones Industrial Average have gained 0.18%, with S&P 500 futures up 0.22% and Nasdaq-100 futures higher by 0.17%.
Options volume came in well above average on Friday, with weekly April 29 series expiration and a flood of corporate earnings driving activity in the options pits.
Puts continued to gain favor on Friday, as the CBOE single-session equity put/call volume ratio rose once again to arrive at 0.86 — a two-month high. The 10-day moving average, meanwhile, rose to 0.69 — a one-week high.
In equity options news, Apple Inc. (NASDAQ:AAPL) restarted its share repurchase program on Friday, creating a fair amount of speculation among options traders. Meanwhile, Facebook Inc (NASDAQ:FB) options traders continued to pile into calls as FB stock heads into all-time-high territory, while Amazon.com, Inc. (NASDAQ:AMZN) saw elevated put volume as the shares contend with resistance near $660.
Apple Inc. (AAPL)
Last week was harsh for AAPL stockholders, but Friday may have brought a spark of hope. After adding $35 billion to its share repurchase program — taking it from $140 billion to $175 billion — Apple embarked on the first leg of that program on Friday to buy back $58 billion in stock over the next two years. With AAPL trading near its lowest levels of the past year-and-a-half, this cash injection could be just what AAPL stockholders are looking for.
Options traders, however, don’t appear too sure about AAPL stock’s short-term prospects. Volume on Friday trended toward put activity, with calls eking out just 56% of the 2.5 million contracts in total volume. Looking at weekly May 6 series open interest, the $94 strike will be a focal point this week, with 6,800 calls and 4,000 puts in residence. What’s more, AAPL is staring up at nearly 14,000 calls at the $95 strike, which could create some short-term headwinds for the stock.
Facebook Inc (FB)
FB stock continues to ride high following Facebook’s stellar quarterly earnings report. The shares have broken out to fresh all-time highs, with FB stock looking to break above $118 in premarket trading this morning. Technically, FB has outstripped its 10-day and 20-day moving averages, so traders should expect a bit of consolidation at some point in the near term.
Options traders aren’t slowing down, however. Volume on FB stock swelled to nearly one million contracts on Friday, with calls snapping up 69% of the day’s take. As for weekly May 6 series OI, call traders have set their sights on $120, as nearly 15,000 calls are currently open at this overhead strike. Put traders, meanwhile, have set up shop at $117, pushing OI to about 3,800 contracts.
Amazon.com, Inc. (AMZN)
Amazon.com’s quarterly report finally convinced quite a few on Wall Street that CEO Jeff Bezos may actually know what he’s doing. Strong quarterly earnings from Amazon appeared to put to rest many concerns regarding Amazon’s revenue growth and spending issues. That said, AMZN stock must now contend with potentially stiff resistance in the $660-$700 region.
In fact, AMZN options traders signaled renewed caution on Friday, when puts rose to account for 49% of the 447,000 contracts traded on the stock. That said, short-term AMZN options traders still have their sights set skyward, with call OI totaling roughly 2,000 contracts at the $660 strike in the May 6 series. Another 3,000 calls are also open overhead at the $675 strike. By comparison, the nearest sizeable put accumulation totals 688 contracts at the May 6 series $650 strike.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
