Tuesday’s Vital Data: Bank of America Corp (BAC), Tesla Motors Co (TSLA) and Lululemon Athletica Inc. (LULU)

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Labor Day marked the unofficial end to summer in the U.S., and Wall Street appears ready to shrug off the doldrums and head higher.

Tuesday’s Vital Data: Bank of America Corp (BAC), Tesla Motors Co (TSLA) and Lululemon Athletica Inc. (LULU)Heading into the open this morning, U.S. stock futures are pointing toward gains, as traders return well rested from a long holiday weekend. At last check, futures on the Dow Jones Industrial Average were up 0.09%, S&P 500 were higher by 0.09% and Nasdaq-100 futures had added 0.1%.

Friday’s options activity was not as brisk as one would have expected given the poor August jobs report, arriving just ahead of the three-week average. Overall, 14.4 million calls and 12.9 million puts changed hands on the session. On the CBOE, a rise in call volume drove the single-session equity put/call volume ratio lower to 0.61, while the 10-day moving average held at a one-month high of 0.66.

Providing fuel for Friday’s options activity, Bank of America Corp (NYSE:BAC) shrugged off a weaker-than-expected August nonfarm payrolls report to head higher, and options traders followed suit with heavy call volume. Meanwhile, Tesla Motors Co (NASDAQ:TSLA) puts remained popular as the stock deals with fallout from the SolarCity Corp. (NASDAQ:SCTY) buyout. Finally, Lululemon Athletica Inc. (NASDAQ:LULU) plunged as second-quarter revenue missed the mark.

Tuesday’s Vital Options Data: Bank of America Corp (BAC), Tesla Motors Co (TSLA) and Lululemon Athletica Inc. (LULU)

Bank of America Corp (BAC)

Interest-rate-sensitive BAC stock failed to plunge following Friday’s weaker-than-expected August jobs report. The jobs data was supposed to be a litmus test for the Fed’s recent hawkish interest-rate commentary, and a strong or in-line report could have given the central bank the go-ahead to raise rates at its next meeting this month.

However, attention has now shifted to the December meeting, and BAC shareholders are betting on a coming hike.

In fact, BAC saw a continued flood of call options on Friday. Overall, roughly one million contracts traded on BAC on Friday, with calls snapping up 77% of the day’s take.

A considerable degree of Friday’s activity could be attributed to weekly September 2 expiration, with Trade-Alert.com reporting that a block of 96,461 $16 strike calls traded at the ask of 2 cents — hinting at the closure of an existing sold call position. However, another block of 50,000 September 30 series calls traded at the $16 strike for the bid of 42 cents.

Tesla Motors Co (TSLA)

The much-maligned SolarCity deal continued to haunt TSLA stockholders on Friday. The shares closed out the week with another 1.5% decline, pushing TSLA below psychological support at $200. Tesla stock has not traded below $200 since late June, when the stock was quickly rescued by a positive reaction to quarterly earnings.

There is no earnings report to save TSLA this time around, however.

Put options were favored on Friday. Total volume came in at 356,000 contracts, with puts raking in 56% of the day’s take. Naturally, the $200 strike is the center of attention among near-term put options, with over 2,000 contracts in residence in the weekly September 9 series. Call traders, however, have targeted the $210 strike in the weekly series, with open interest totaling 1,450 contracts.

TSLA is challenging $200 in premarket trading, but the shares have yet to push north of this hurdle.

Lululemon Athletica Inc. (LULU)

LULU stock was hammered for a loss of more than 10% on Friday, as shareholders expressed their displeasure with the company’s second-quarter earnings report. For the quarter, Lululemon said it earned 39 cents per share on revenue of $514.5 million.

While earnings beat expectations by a penny, sales came up shy of the expected $516 million. What’s more, Lululemon set full-year earnings at between $2.07 and $2.15 per share, versus the consensus for $2.15 per share.

Options traders were also on the bearish warpath on Friday, with puts snapping up 56% of the nearly 250,000 contracts traded on LULU stock. The shares are now trading below all meaningful call OI among near-term options, with most traders focusing on the out-of-the-money $70 strike.

In the September 16 series, the $70 strike is home to roughly 1,900 calls and 2,900 puts. Peak put OI for the series, however, totals 3,400 contracts at the $67.50 strike, and could be a sign that options traders expect LULU to fall further.

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/2016/09/tuesdays-vital-data-bank-america-corp-bac-tesla-motors-co-tsla-lululemon-athletica-inc-lulu/.

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