Wednesday’s Vital Data: Bank of America Corp. (BAC), Apple Inc. (AAPL) and Nike Inc (NKE)

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U.S. stock futures are headed higher again this morning, as Brexit concerns continue to fade

Wednesday’s Vital Data: Bank of America Corp. (BAC), Apple Inc. (AAPL) and Nike Inc (NKE)Rising oil prices are providing extra lift for equities, as crude futures are up nearly 1% at $48.24 per barrel in premarket action. With bullish options on the table, traders will look forward to reports on consumer spending and home sales later this morning.

Against this backdrop, futures on the Dow Jones Industrial Average have added 0.6%, with S&P 500 futures up 0.59% and Nasdaq-100 futures higher by 0.6%.

Options activity retreated sharply on Tuesday, but remained well above average with 15.4 million calls and 14.4 million puts changing hands. Over on the CBOE, call volume surged, pushing the single-session equity put/call volume ratio to a one-month low of 0.59. The 10-day moving average slipped to 0.71.

In equity option news, Bank of America Corp. (NYSE:BAC) options traders are gearing up for a bull run ahead of today’s second round of Federal Reserve stress tests. Meanwhile, Apple Inc. (NASDAQ:AAPL) is taking a conservative stance on iPhone 7 sales, with a key semiconductor supplier echoing Apple’s caution. Finally, Nike Inc (NYSE:NKE) saw a rise in put volume ahead of last night’s quarterly report.

Wednesday’s Vital Options Data: Bank of America Corp. (BAC), Apple Inc. (AAPL) and Nike Inc (NKE)

Bank of America Corp. (BAC)

BAC stock rallied more than 4% yesterday as investors shook off Brexit worries and focused on today’s second round of stress test results. The Comprehensive Capital Analysis and Review (CCAR) results are due today, and, following positive results, BAC could be set to return millions to stockholders through a dividend increase and stock buybacks.

In anticipation of a positive result, BAC options traders piled into calls on Tuesday. Overall, nearly 1.3 million contracts changed hands on BAC yesterday, with calls snapping up 80% of the day’s take. In the weekly July 1 series, which expires this Friday, call traders are focused on the out-of-the-money $13.50 strike, where more than 50,000 contracts currently reside.

Even with Tuesday’s 4.27% rally, BAC still needs to gain another 6.3% to push these $13.50 strike calls into the money — no small feat with expiration looming in just two days.

Apple Inc. (AAPL)

You’re going to hear a lot about the Apple iPhone 7 over the coming weeks, especially if unit sales projections continue to fall. Apple itself was the latest to lower expectations, taking a conservative stance on iPhone 7 orders.

What’s more, semiconductor supplier Advanced Semiconductor Engineering (ADR) (NYSE:ASX) told Nikkei that “The big client in the U.S. is a little more conservative when placing orders this year.” With Apple accounting for 31.2% of ASX’s sales last year, there can be no doubt as to the identity of the “big client.”

Still, AAPL stock saw a rise in call volume on Tuesday. Total volume came in at 832,000 contracts on Tuesday, with calls accounting for a 61% of the day’s take — arriving near AAPl’s average daily call volume in terms of percentage of total volume.

However, options sentiment is deteriorating fast overall for AAPL, as the stock’s July/August put/call open interest ratio has ballooned to a reading of 1.01 in recent weeks — a reading in the upper third of the past year’s worth of results.

Nike Inc. (NKE)

After the close last night, Nike reported fourth quarter earnings of 49 cents per share on revenue of $8.24 billion. While earnings beat expectations by a penny per share, revenue fell short of Wall Street’s target of $8.28 billion. Despite the miss, however, NKE stock has rebounded from early premarket losses to trade up over 1% heading into the open.

A rally could catch options traders off guard, as NKE puts were quite popular on Tuesday ahead of the report. Specifically, these typically bearish bets accounted for 53% of the more than 436,000 contracts traded on NKE yesterday.

Among short-term traders, NKE’s July 1 series $56 strike call was the most popular, sporting OI of 12,666 contracts, followed closely by the $54 strike put (11,123 contracts) and the $50 strike put (11,831 contracts).

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/2016/06/wednesdays-vital-data-bank-america-corp-bac-apple-inc-aapl-nike-inc-nke/.

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