The major market indices finished flat to lower on Thursday, as Wall Street expressed mixed feelings on the Fed’s decision to once again hold off on an interest-rate hike. While traders got wanted they wanted from the Fed, some analysts opined that the lack of justification for a hike boded ill for economic growth. All in all, the S&P 500 fell 0.26% while the Dow Jones Industrial Average shed 0.39%.
In the options pits, volume remained below average on Thursday, as traders backed off ahead of the Fed meeting Overall, the CBOE’s single-session equity put/call volume ratio edged higher to 0.74, while the 10-day moving average held at a one-week high of 0.78. That said, expect volume to pick up today given that September options expire after the close this afternoon.
In equity options news, Apple Inc. (NASDAQ:AAPL) drew a jump in option volume after and Federal court sided with the company in an ongoing patent infringement suit. Meanwhile, Oracle Corporation (NYSE:ORCL) was flooded with put volume after the company missed Wall Street’s third-quarter sales target. Finally, Amazon.com, Inc. (NASDAQ:AMZN) made a rare appearance on the most active options listing following a bullish research note from Cantor.
Apple Inc. (AAPL)
AAPL shares fell more than 2% on Thursday, after the stock was once again rejected by technical resistance at its 50-day moving average. The decline came despite a favorable U.S. Federal Court ruling that said Samsung (SSNLF) should have received an injunction barring the sale of devices that infringe on Apple’s patents. According to Reuters, the Federal Circuit court said that the lower appeals court abused its discretion by not preventing Samsung from selling infringing devices.
Option volume swelled past AAPL’s three-week average, with 1.05 million contracts changing hands on Thursday. Calls barely edged out puts in terms of popularity yesterday, accounting for 51% of the day’s activity.
With September options expiring this afternoon, AAPL traders will want to keep a close eye on heavy put (54,699 contracts) and call (66,201 contracts) open interest at the overhead $115 strike. Options-related resistance and technical hurdles in the area could stall any attempt at a rally until next week.
Oracle Corporation (ORCL)
ORCL stock fell more than 4% on Thursday, as traders expressed their displeasure with Oracle’s lackluster quarterly report. For the record, Oracle posted fourth-quarter earnings of 53 cents per share on $8.45 billion in revenue. The Street was expecting 52 cents per share on sales of $8.51 billion. Additionally, Oracle’s fourth-quarter guidance was below par, implying that additional weakness could be just down the road for the software giant.
Option bears piled on in the wake of ORCL stock’s rout. The stock saw elevated volume of 139,089 contracts in the wake of Oracle’s report, with puts snapping up 82% of the take. As for today’s September option expiration, traders should keep a keen eye on $37 if ORCL finds it’s feet this afternoon. Specifically, the Sep $37 strike is home to 10,575 calls and 17,314 puts, potentially creating a sticking point for the security.
Amazon.com, Inc. (AMZN)
AMZN stock added more than 2% on Friday after Cantor offered up bullish commentary on the company yesterday. The research firm touted Amazon’s latest $50 Kindle, saying the device could appeal to many consumers who are priced out of Apple’s iPad. Cantor also pointed out that Amazon has launched Prime Now, a one-hour delivery service, for all of Los Angeles.
Not a usual member of the top ten most active options listing, AMZN’s appearance on Thursday is likely due to the overall low volume on the session. About 98,000 contracts traded on AMZN yesterday, with calls making up 57% of the volume.
Looking at potential areas of congestion for AMZN through today’s September expiration, the $35 and $40 levels could create some issues. Currently, there are 2,841 calls and 1,265 puts at the overhead $35 strike, while 3,218 calls and 1,489 puts currently reside at the $40 strike.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
