Thursday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB), American Airlines Group Inc (AAL)

Hopes for a Greek bailout buoyed stocks on Wall Street Wednesday, those heavy weekly losses are still unavoidable. The S&P 500 is set to finish at its lowest weekly close in mid-April. Options traders appeared to become more hopeful on Wednesday, as call volume returned to the mix. Overall, the CBOE equity put/call volume ratio fell sharply to 0.62, while the 10-day moving average advanced to 0.68.

stock-market-today-185On the equity front, volume was somewhat anemic, but calls still dominated Apple Inc.’s (NASDAQ:AAPL) backdrop after Pacific Crest boosted its fiscal 2015 earnings and iPhone sales outlooks. Also in analyst action, Facebook Inc (NASDAQ:FB) was targeted by a bullish note at Cantor Fitzgerald, with the brokerage firm boosting its price target on FB stock.

Finally, airlines came under pressure on Wednesday after the Department of Justice announced a probe into price collusion among carriers. American Airlines Group Inc (NASDAQ:AAL) was a favorite target among call options traders following the news.

07-02-2015 Top Ten Options

Apple Inc. (AAPL)

Pacific Crest boosted its 2015 earnings estimates for Apple on Wednesday, with the analyst citing strong iPhone sales as the driver. The brokerage firm now sees fiscal year iPhone sales of 236 million, up from 229 million in prior estimates. Pacific Crest now sees third-quarter earnings of from $2.05 per share and fourth-quarter earnings of $1.96 per share. Fiscal 2015 earnings were lifted from $9.13 to $9.41 per share.

Options volume was light on AAPL on Wednesday, with only about 593,169 contracts changing hands. The bullish bias remains in effect for AAPL, as calls accounted for 60% of Wednesday’s volume.

Looking ahead to next week, peak open interest for the weekly July 10 series totals 16,711 contracts at the overhead $130 strike, with the $129 and $133 strikes sporting OI of 11,975 contracts and 12,346 contracts, respectively. On the put side, the $124 strike is king, with OI of 11,959 contracts.

Facebook Inc (FB)

Facebook stock got a bump on Wednesday after Cantor Fitzgerald boosted its price target on FB to $100 from $92. The brokerage firm also reiterated its “buy” rating on FB stock. According to Cantor, global Internet ad spending is expected to grow by 15% in the next few years, replacing TV as the largest medium by 2020. Facebook is expected to claim quite a bit of that territory.

Calls remain the investment vehicle of choice for FB stock options traders, by a wide margin. More than 210,000 contracts crossed the tape for Facebook on Wednesday, with calls comprising 71% of the activity.

Looking at the weekly July 10 series, peak open interest totals 4,020 contracts at the $88 call strike, but a showdown at the $90 level may be brewing. Currently, there are 2,246 calls and 1,258 puts open at the weekly July 10 series $90 strike, and these numbers should grow once the July 4 holiday weekend is over.

American Airlines Group Inc (AAL)

AAL stock was holding firm until about 2 p.m. yesterday afternoon, when the stock all but rolled off a cliff. While there were no direct headlines related to American Airlines, the sector came under intense scrutiny after the Department of Justice announced it was probing airlines for price collusion and antitrust violations. The DoJ’s move comes following a drop in airfares across the board and a surge in airline seating.

Options volume on AAL jumped to a near-term record on Wednesday, with 167,086 contracts trading on the security. Furthermore, despite a nearly 3% drop in AAL stock, calls made up 69% of yesterday’s volume. In the weekly July 10 series, the out-of-the-money 44 strike is currently home to peak open interest of 11,534 calls.

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

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