Wednesday’s Vital Data: Netflix, Inc. (NFLX), Advanced Micro Devices, Inc. (AMD) and JPMorgan Chase & Co. (JPM)

Advertisement

U.S. stock futures are fairly flat this morning, though Wall Street continues to push toward record highs. Once again, there is little economic data to speak of, but traders will be keeping a close eye on tomorrow’s European Central Bank’s policy-setting meeting as well as any indications for next week’s Federal Open Market Committee meeting. At last check, futures on the Dow Jones Industrial Average were higher by 0.05%, while S&P 500 futures were down 0.02% and Nasdaq-100 futures were roughly unchanged.

Wednesday’s Vital Data: Netflix, Inc. (NFLX), Advanced Micro Devices, Inc. (AMD) and JPMorgan Chase & Co. (JPM)On the options front, volume retreated once again on Tuesday to arrive well below average. In total, about 12.4 million calls and 10.7 million puts changing hands on the session. On the CBOE, the single-session equity put/call volume ratio declined for the third-straight session, arriving at 0.58, while the 10-day moving average held at 0.61.

Among Tuesday’s volume leaders, Netflix, Inc. (NASDAQ:NFLX) calls jumped after Evercore ISI upgraded the shares and questioned streaming competition. Elsewhere, Advanced Micro Devices, Inc. (NASDAQ:AMD) soared on reports of a licensing deal with Intel Corporation (NASDAQ:INTC), and JPMorgan Chase & Co. (NYSE:JPM) is considering paying out a special dividend.

Wednesday’s Vital Options Data: Netflix, Inc. (NFLX), Advanced Micro Devices, Inc. (AMD) and JPMorgan Chase & Co. (JPM)

Netflix, Inc. (NFLX)

NFLX stock jumped more than 4.5% on Tuesday after analysts at Evercore ISI upgraded the shares to “hold” from “sell” and set a $111 price target. While a “hold” and a target that discounts NFLX by more than 12% may seem less than inspiring, Evercore’s statement that “much of the competition we feared seems to be gaining little traction” more than made up for the neutral stance. In short, competition from Amazon.com, Inc. (NASDAQ:AMZN) and Hulu is failing to meet analyst expectations.

NFLX stock options traders keyed off this sentiment when they piled into the shares yesterday. More than 312,000 contracts crossed the tape on NFLX stock, with calls snapping up a sizeable 60% of the day’s take — well above the norm of about 53%. That said, there is still room for more call traders to jump on the bandwagon, as NFLX’s December put/call open interest ratio rests at 0.92, with calls and puts just out of parity.

A closer look reveals that peak cal OI in the December series total more than 20,000 contracts at the $130 strike, which also happens to be home to peak put OI in the series of roughly 12,000 contracts.

Advanced Micro Devices, Inc. (AMD)

AMD could be a double-digit stock before the end of the year if yesterday’s rumors pan out. According to a report on Investors Business Daily, AMD is rumored to be licensing its Radeon graphics processing chip for use in Intel’s next generation of CPUs. The deal would be a coup for AMD, which has long been an Intel rival in the semiconductor market. Both Intel and AMD have declined to comment on the rumors.

But that hasn’t stopped AMD stock and options traders from speculating. AMD rose nearly 9% on Tuesday, and options traders flooded the stock with calls. Total volume rose to a near-term high of 293,000 contracts, with calls accounting for a whopping 70% of the day’s take. That said, puts still rule the roost in AMD’s December series, where the stock’s put/call OI ratio has ballooned to a perch at 1.19. AMD bears are focused on the Dec $8.50 strike, where roughly 35,000 contracts have accumulated. By comparison, peak call OI for the same series numbers just 14,000 contracts at the $10 strike.

JPMorgan Chase & Co. (JPM)

JPMorgan Chase is considering paying out a special dividend, according to CEO Jamie Dimon. Speaking at an investor conference yesterday, Dimon said that due to the run up in JPM stock, he would rather pay out capital to shareholders than repurchase shares. JPM stock is up more than 25% this year, with most of that gain coming in the wake of the November election.

Options traders may already be on the march toward capturing any special dividend. Call volume soared on JPM on Tuesday, accounting for 64% of the more than 213,000 contracts traded on the stock.

What’s more, Trade-Alert.com data reveals that two large blocks of deep-in-the-money January 2017 $72.50 and $75 calls (totaling 12,500 contracts each) traded as a spread on JPM stock yesterday. Options traders will often use such spreads as a dividend capture play on the underlying stock.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/12/vital-data-netflix-inc-nflx-advanced-micro-devices-inc-amd-and-jpmorgan-chase-co-jpm/.

©2024 InvestorPlace Media, LLC