U.S. stock futures are treading water about at breakeven this morning. The deciding factor this morning may well be the latest monetary policy decision from the European Central Bank, which is weighing extending its asset-buying program beyond March 2017.
Stateside, U.S. weekly jobless claims are on tap, and could also have an impact on today’s session.
Ahead of the open, futures on the Dow Jones Industrial Average are up 0.06%, while the S&P 500 futures have added 0.08% and Nasdaq-100 are higher by 0.04%.
Wednesday’s options activity dipped from Tuesday’s post-holiday ramped-up volume, with 13.3 million calls and 10.7 million puts changing hands for a more average pace. Over on the CBOE, calls remained popular though the single-session equity put/call volume ratio still rose to 0.57 off Tuesday’s one-year low of 0.50. The 10-day moving average held at 0.65.
Providing fuel for Wednesday’s options activity, Apple Inc. (NASDAQ:AAPL) finally unveiled the official specs for the coming iPhone 7 and the iPhone 7 Plus, though Wall Street appeared less than enthused. Elsewhere, Micron Technology, Inc. (NASDAQ:MU) hit yet another year-to-date high, extending recent gains on positive DRAM news. Finally, MannKind Corporation (NASDAQ:MNKD) shares retreated again following a run up on news that the company would challenge Mylan NV’s (NASDAQ:MYL) EpiPen with an inhalable alternative.
Apple Inc. (AAPL)
If you missed yesterday’s Apple press event, don’t worry, you didn’t miss much. There was little fanfare outside of the iPhone 7 reveal, and even this reveal was largely expected by Apple speculators.
The new iPhone will receive the typical incremental upgrades to speed, processing power, storage, graphics, etc., … but nothing groundbreaking or innovative, and, of course, no “One more thing.” All in all, AAPL stock received a 0.6% bump by the close — a bump that the shares appear to be shedding in premarket trading this morning after a downgrade to “market perform” from Wells Fargo.
AAPL stock options traders were still quite active on Wednesday, though, sending more than 1.3 million contracts across the tape. Calls were, of course, the option of choice on the day, snapping up 65% of the session’s take.
Looking at weekly Sept 9 series open interest, AAPL is trading just north of more than 26,000 contracts at the $108 strike that may be in danger of finishing out of the money if selling emerges heading into Friday. Meanwhile, peak call OI for the series totals roughly 37,000 contracts at the $110 strike, which lies about 1.5% out of the money.
Micron Technology, Inc. (MU)
MU stock has been impressive so far in 2016, with the shares adding more than 20% year-to-date. A recovery in DRAM prices and demand has helped boost MU to its current lofty position, and, according to reports, the DRAM market may be getting a serious boost.
Specifically, Hewlett-Packard Enterprise Co (NYSE:HPE) suggested last week that DRAM density in mobile would likely double, increasing demand significantly. What’s more, Micron stands to benefit more from increased demand that its competitors, who are already running at production capacity.
MU stock options traders have been on a tear with call volume of late, and Wednesday’s breakout above short-term resistance at $17 provided another sentiment lift. Total volume rose to more than 156,000 contracts, with calls accounting for an impressive 82% of the day’s take.
Judging by call OI in the September and October series, options traders may be playing catchup for a while, as heavy call OI (which totals more than 30,000 contracts in both series) lies at the $17 strike, with little in the way of additional OI overhead.
Not only does this clear the way of options-related resistance for MU for the foreseeable future, it also means that options traders could be prompted to shift their expectations higher, resulting in additional buying pressure for MU.
MannKind Corporation (MNKD)
The once high-flying MNKD stock has been reduced to penny-stock levels in the past several weeks. But the company has plans that could reverse its fortunes following the setbacks related to its inhalable insulin drug.
Late last week, MannKind said it was entering the fray with notorious EpiPen manufacturer Mylan. MannKind plans to develop an inhalable version of epinephrine, the drug used to treat anaphylaxis, or life-threatening allergic reactions to food, bee stings and other allergic reactions.
While MNKD stock has declined since the news, options traders have been ramping up their positions on the shares. Volume on Wednesday soared to nearly 157,000 contracts, with calls accounting for nearly all of yesterday’s activity.
The largest contributor to Wednesday’s volume appears to have been a block of 38,000 November $3 strike calls, which traded at an ask price of 2 cents according to Trade-Alert.com. Quite a bold statement given that MNKD closed at 75 cents on the session.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
