Tuesday’s Vital Data: Apple Inc. (AAPL), Alcoa Inc (AA) and Sangamo Biosciences, Inc. (SGMO)

Advertisement

Stocks entered a full-scale retreat on Monday, pushing Wall Street to the brink of its second consecutive monthly decline. Uncertainty surrounding the Federal Reserve’s direction for monetary policy and weak Chinese economic data continue to be the story on the Street, with biotechs helping to drive the Nasdaq Composite’s leading 3% decline. The Dow Jones Industrial Average brought up the rear with a drop of 1.92%.

Volume in the options pits slipped from Friday’s levels, but remained at average levels by Monday’s close. Overall, the CBOE single-session equity put/call volume ratio jumped to one-month high of 0.94, driving the 10-day moving average continued to 0.78.

In equity options activity, Apple Inc. (NASDAQ:AAPL) saw overall volume drop and puts gain popularity after the company said it sold 13 million new iPhones over the weekend. Alcoa Inc (NYSE:AA) saw a surge in call volume after the company’s board approved a plan to split the aluminum giant into two publicly traded companies. Finally, options volume for Sangamo Biosciences, Inc. (NASDAQ:SGMO) consisted of practically all call contracts after SGMO stock was hammered by continued backlash against the biotech sector.

Tuesday’s Vital Data: Apple Inc. (AAPL), Alcoa Inc (AA) and Sangamo Biosciences, Inc. (SGMO)

Apple Inc. (AAPL)

Apple once again set sales records for the opening weekend of its latest iPhone. But despite selling 13 million of the newly redesigned iPhone, analysts were still nonplussed. Merrill Lynch reiterated a “neutral” rating, RBC said that while sales were positive, Apple only beat expectations by 1 million units, Cowen called sales largely flat, and Bernstein bemoaned a lack of detail on “orders.”

Options traders also seemed less than enthusiastic toward AAPL on Monday. Volume dipped to 642,043 contracts, while puts captured a minor majority of the day’s activity with 51% of the take.

AAPL stock remains trapped between its 10-, 50-, and 200-day moving averages, with the $110 and $115 levels underscoring the shares’ currently trading range. As such, options traders will want to keep a close eye on these strikes in the weekly Oct. 2 series, as well as the monthly October series.

Alcoa Inc (AA)

Aluminum giant Alcoa made a rare appearance on the top 10 most active options listing on Monday after the company said its board has approved a plan to split Alcoa into two publicly traded companies. One of the resulting companies will comprise of Alcoa’s bauxite, alumina, aluminum, casting and energy divisions, while the other will include global rolled products, engineered products and solutions, and transportation and construction solutions. The split will take place in the second half of 2016.

Option volume was well above average for AA on Monday, with 131,115 contracts changing hands overall. Most of the activity was centered in long-term option contracts, with LEAPS garnering a fair share of attention. Furthermore, calls dominated the day, comprising 80% of the take. As such, most of these contracts appear designed as arbitrage plays surrounding the eventual split.

Sangamo Biosciences, Inc. (SGMO)

SGMO has been a victim of the biotech backlash instigated by recent headlines regarding perceived price gouging by drug makers and the now infamous comments by Hillary Clinton. Still, SGMO shares were in retreat well before the negative sector spotlight, though recent reports appeared to be changing investor sentiment. Specifically, Sangamo reported data on Sept. 21 “data demonstrating sustained functional control of viral load in the absence of antiretroviral drugs (ART) in two of three HIV-infected subjects treated in Cohort 3* of its Phase 1/2 study (SB-728-1101) of its ZFP Therapeutic (SB-728-T) for the treatment of HIV/AIDS.”

Whether due to optimism regarding Sangamo’s HIV treatment or increased short activity, call volume has been on the rise for SGMO stock. In fact, nearly all of the 120,364 contracts traded on SGMO on Monday crossed the tape as call contracts. Looking at the short term, peak October call open interest totals 497 contracts at the $10 strike, while peak put OI totals 596 contracts at the in-the-money $7 strike.

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/2015/09/tuesdays-vital-data-apple-inc-aapl-alcoa-inc-aa-sangamo-biosciences-inc-sgmo-options/.

©2024 InvestorPlace Media, LLC