Tuesday’s Vital Data: Twitter Inc (TWTR), Apple Inc. (AAPL) and Netflix, Inc. (NFLX)

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U.S. stock futures are cautiously higher in the early going this morning, as fears over Deutsche Bank AG’s (USA) (NYSE:DB) financial situation eased. However, the British pound plunged to a 31-year low, boosting U.K. stocks and raising Brexit fears Stateside once again.

Tuesday's Vital Data: Twitter Inc (TWTR), Apple Inc. (AAPL) and Netflix, Inc. (NFLX)Heading into the open, futures on the Dow Jones Industrial Average have edged 0.07% higher, while S&P 500 futures have added 0.03% and Nasdaq-100 futures are up 0.11%.

Monday’s options activity dropped off sharply, with a below-average 11.1 million calls and 9.7 million puts changing hands on the session. On the CBOE, the single-session equity put/call volume ratio ticked higher to 0.64, while the 10-day moving average rose to 0.65.

Driving Monday’s options volume, Twitter Inc (NYSE:TWTR) call options jumped on reports that Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) hired Lazard Ltd. (NYSE:LAZ) to help it mull a bid for the social media firm. Also on the acquisition front, Netflix, Inc. (NASDAQ:NFLX) rose sharply as rumors surfaced again that Walt Disney Co (NYSE:DIS) was once again shopping for acquisitions for its media division. Finally, Apple Inc. (NASDAQ:AAPL) saw renewed call activity ahead of today’s Apple Pay launch in Russia.

Tuesday's Vital Data: Twitter Inc (TWTR), Apple Inc. (AAPL) and Netflix, Inc. (NFLX)

Twitter Inc (TWTR)

Still riding the M&A train, TWTR stock rose more than 4% on Monday after reports surfaced that Google parent Alphabet hired merger and acquisition specialist Lazard to help it determine a potential bid for Twitter. The struggling social media firm has seen a plethora of buyout rumors in the past week, though reports now indicate that both AT&T Inc. (NYSE:T) and Disney are fading as potential suitors.

Speculation in the options pits is still running full-tilt for TWTR. Total volume rose to roughly half-a-million contracts on Monday, with calls snapping up 75% of the day’s take. The recent flood of TWTR calls has pushed the stock’s October put/call open interest ratio down from a reading north of 1.00 last month to its current perch at 0.84.

What’s more, short-term speculation in the weekly October 7 series has reached a fever pitch, as the put/call OI ratio has plunged to 0.50, as calls double puts among options set to expire at the end of this week. Clearly, TWTR options traders are expecting something big to go down before the close on Friday.

Netflix, Inc. (NFLX)

While Walt Disney may be backing away from Twitter, speculation is rising that the mouse’s attention is shifting back toward Netflix. Now, if you follow either NFLX or DIS regularly, you know this merger-and-acquisition speculation pops up for the duo ever three to four months, so take the speculation with a grain of salt.

That said, with Disney already apparently in acquisition mode after reportedly scouting Twitter, there could be a bit more credence to the rumors this time around.

NFLX stock is certainly reacting with a bit more vigor this time, rallying more than 4% on the speculation. What’s more, options traders were also spurred into action, sending more than 311,000 contacts across the board on NFLX. Typically bullish call options accounted for 60% of Monday’s activity.

Looking out to the monthly October 21 series, the in-the-money $100 strike is home to peak call OI, with more than 16,000 contracts in residence, with roughly another 15,000 contracts overhead at the $105 strike. So, while speculation is on the rise, it’s nowhere near the speculative peak plaguing TWTR stock at the moment.

As a reminder, Netflix will release its third-quarter earnings report after the close on October 17. So, expect to see activity in the October 21 series rise sharply in the coming weeks.

Apple Inc. (AAPL)

AAPL speculation has died off considerably in the past two weeks, and analyst activity surrounding iPhone 7 sales is finally petering out. Traders turned their attention on Monday toward Apple’s launch of Apple Pay in Russia, which goes live today.

While an important market for Apple, the launch has done little to reverse AAPL’s slow retreat from overhead resistance in the $115 region. The stock has now closed the past six sessions below its 10-day moving average, and appears to be headed toward a confrontation with support at $110.

Options traders have remained overwhelmingly positive on AAPL’s prospects. On Monday, call volume continued to account for a healthy portion of total daily volume, snapping up 64% of the more than 480,000 contracts traded on the session. Optimism is high this week for AAPL, as peak call OI for the October 7 series totals more than 21,000 contracts at the out-of-the-money $115 strike.

Furthermore, the $113 and $114 strikes both sport call OI of more than 11,000 contracts. But it could take more than Apple Pay launching in Russia to provide any serious boost for the shares.

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/2016/10/tuesdays-vital-data-twitter-inc-twtr-apple-inc-aapl-netflix-inc-nflx/.

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