Friday Vital Data: Facebook Inc (FB), General Electric Company (GE) and Tesla Inc (TSLA)

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U.S. stock futures are pointing toward a moderately positive open this morning following a round of better-than-expected corporate earnings and positive economic data. Additionally, sentiment was boosted by comments from Treasury Secretary Steven Mnuchin, who said in a speech yesterday that details for President Donald Trump’s tax reforms would arriving in the near future. However, concern remains ahead of a key French election that could set the stage for a French exit from the EU.

Friday Vital Data: Facebook Inc. (FB), General Electric Company (GE) and Tesla Inc (TSLA)Heading into the open, futures on the Dow Jones Industrial Average have added 0.01%, S&P 500 futures are up 0.06% and Nasdaq-100 futures have gained 0.11%.

On the options front, volume was brisk as about 16.9 million calls and 17.1 million puts changed hands on the session. Puts remained highly active, even on the CBOE, where the single-session equity put/call volume ratio came in at 0.68 and the 10-day moving average held at a three-month high of 0.70.

Turning to Thursday’s most active options, Facebook Inc (NASDAQ:FB) calls gained in popularity despite a downgrade at Vetr and recent negativity due to a live-streamed murder in Cleveland. Elsewhere, General Electric Company (NYSE:GE) saw a wave of put activity ahead of this morning’s quarterly earnings report and Tesla Inc (NASDAQ:TSLA) also saw heavy put volume amid a Model X and Model S recall.

Friday Vital Options Data: Facebook Inc. (FB), General Electric Company (GE) and Tesla Inc. (TSLA)

Facebook Inc (FB)

With earnings less than a month away, Vetr downgraded FB stock to “hold” from “buy” yesterday. The downgrade follows on the heels of Facebook’s annual F8 Developer Conference and the unfortunate live streaming of a murder in Cleveland via Facebook Live.

Despite the added controversy, FB stock has moved higher this week, adding a bit of cushion between it and support at $140. Furthermore, sentiment among Facebook stock options traders appears to be on the upswing.

Specifically, volume topped out at more than 501,000 contracts for FB yesterday, hitting a near-term high. What’s more, calls made up 64% of the day’s take, returning Facebook call activity to just shy of average for the past month. As a result of this recent attention to FB calls, the 5 May put/call open interest ratio has edged lower from 0.57 on Wednesday to its current perch at 0.56, as calls are added at a faster rate than puts among options most affected by the company’s quarterly report. A continuation of this trend could have bullish implications for Facebook’s quarterly earnings report on May 3.

General Electric Company (GE)

GE stock is up nearly 2% in premarket trading this morning after General Electric posted better-than-expected first quarter results this morning. For the quarter, GE said it earned 21 cents per share, beating the Street’s view for 17 cents per share. Revenue also topped expectations at $27.66 billion versus the consensus of $26.4 billion. GE also reaffirmed its full-year earnings outlook, further bolstering sentiment.

GE options traders were not so keen on the shares ahead of this morning’s report, as a last-minute rush of put options held sway on Thursday. Total volume came in north of 380,000 contracts, with puts snapping up 62% of the day’s take. That said, those last-minute fears were belied by an established bullish presence in the options pits ahead of the report, with the 21 April put/call OI ratio resting at a near-term low of 0.30. With GE stock on the march higher, short-term GE calls have a solid chance of realizing a profit.

Tesla Inc (TSLA)

First it was valuation concerns that reigned in TSLA stock’s rapid advance into all-time high territory. Now, it’s a recall on roughly 53,000 Model S and Model X vehicles. Specifically, Tesla is recalling the vehicles due to a faulty electric parking brake assembly that could prevent the brake from releasing. According to Tesla, only about 2% of the recalled vehicles are affected. Given the euphoria surrounding TSLA right now, the shares needed sentiment to come down a notch or two, and the shares could also use a bit of a correction to blow off some steam.

TSLA options traders appear to be aware of this fact, as puts took control of yesterday’s activity in the options pits. In fact, 53% of yesterday’s more than 379,000 contracts traded on TSLA were of the put variety.

Furthermore, the recent attention to puts has driven TSLA’s May put/call OI ratio to a perch at 0.97. This ratio is far from an annual peak, indicating that there is room for more put activity in the coming weeks.

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


Article printed from InvestorPlace Media, https://investorplace.com/2017/04/fridays-vital-data-facebook-inc-fb-general-electric-company-ge-tesla-inc-tsla/.

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