U.S. stock futures are pointing toward broad gains on the open this morning, as Wall Street joins in a global oil-fueled rally. Crude oil prices jumped 1.4% to $43.62 in overseas trading after Venezuelan President Nicolas Maduro said Sunday that OPEC was nearing a deal to stabilize oil markets.
The potential oil deal has overshadowed concern ahead of monetary policy decisions from both the Federal Reserve and the Bank of Japan later this week.
Against this backdrop, futures on the Dow Jones Industrial Average have soared 0.42%, with S&P 500 futures rising 0.44% and Nasdaq-100 futures up 0.37%.
Friday’s options activity was brisk, with the expiration of monthly September options driving heavy volume on the session. Overall, 18.8 million calls and 17.5 million puts changed hands on Friday. As for the CBOE, the single-session equity put/call volume ratio arrived at 0.65 on Friday, while the 10-day moving average held at 0.64.
Providing fuel for Friday’s options volume, Apple Inc. (NASDAQ:AAPL) continued to drive higher following news that some models of its iPhone 7 have already sold out. Elsewhere, Twitter Inc’s (NYSE:TWTR) call volume surged in the wake of Twitter’s first online broadcast of NFL’s Thursday Night Football. Finally, Advanced Micro Devices, Inc. (NASDAQ:AMD) stock appears to be recovering from last week’s dilution concerns, with options traders piling into calls as a result.
Apple Inc. (AAPL)
AAPL stock took a bit of a breather on Friday, dipping about half a percent on the session. But the retreat appears to be more of the consolidation variety after AAPL surged roughly 12% following news that some models of its newly released iPhone 7 have already sold out. For those technical traders out there, AAPL stock blew through its top Bollinger Band by a wide margin last week, hinting that the shares may be in for additional upside once an initial round of profit taking has played out.
Options traders certainly appear to be betting on additional gains. Friday’s volume swelled to a near-term high of 2.5 million contracts on AAPL stock, with calls accounting for roughly 64% of the day’s take. Peak open interest for the weekly September 23 series rests at the $115 strike, where 27,000 calls and 21,000 puts currently reside. Implieds for the series are pricing in a move of about 3% of AAPL stock this week, with the upper bound lying at $117.95 and the lower bound at $112.05.
Twitter Inc (TWTR)
TWTR stock surged nearly 4.5% on Friday after Twitter successfully broadcast its first installation of Thursday Night Football as part of its deal with the NFL. The broadcast reached a reported 2.3 million viewers worldwide, though the NFL said that the average audience size was 243,000 people with an average watch time of 22 minutes per viewer. Twitter paid $10 million for the deal back in April.
TWTR options traders appeared encouraged by the report, given the heavy call bias in Friday’s options activity. Overall volume came in at 374,000 contracts, with calls snapping up a sizeable 80% of the day’s take. Looking at weekly September 23 series OI, call traders have set their sights on the $21 strike, where 8,300 contracts currently reside. Another 6,000 calls are open at the $20 strike, while peak put OI for the series totals 5,400 contracts at the $19 strike.
Advanced Micro Devices, Inc. (AMD)
AMD stock is coming off a rough week. The shares saw their impressive rally off their April lows shattered last Friday by news that the company was issuing $600 million of AMD stock and selling $450 million worth of convertible debt. AMD hit a low near $6 last week, but had turned higher heading into Friday, as traders appeared to have finally digested the dilution concerns.
In fact, calls were all the rage on Friday, with these typically bullish bets snapping up 92% of the more than 284,000 contracts traded on the session.
Digging into the action at Trade-Alert.com reveals several large call blocks traded in the January 2017 and April 2017 series. Specifically, two blocks of 35,282 contracts traded on the January 2017 $9 strike for the bid price of 24 cents, while a block of 32,130 April $7 calls traded at the ask price of $1.03.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
