Tuesday’s Vital Data: Facebook Inc (FB), Nvidia Corporation (NVDA) and Deutsche Bank AG (USA) (DB)

U.S. stock futures are trading lower once again this morning, as Wall Street heads for a second down day to catch its breath in the wake of a record-breaking rally. While some analysts are questioning the market’s recent highs, North Korea’s ballistic missile test over the weekend and President Donald Trump’s wire-tapping claims remain fresh geopolitical concerns.

stock market todayHeading into the open, futures on the Dow Jones Industrial Average are down 0.11%, while S&P 500 futures have shed 0.16% and Nasdaq-100 futures are off 0.17%.

On the options front, volume was anemic on Monday, arriving well below average for the session. In total, only about 11.6 million calls and 10.4 million puts changed hands yesterday. Turning to the CBOE, the single-session equity put/call volume ratio dipped to 0.67, with the 10-day moving average held at 0.63.

Turning to Monday’s volume leaders, Facebook Inc (NASDAQ:FB) saw lower-than-usual call options volume amid a fresh round of legal troubles in Italy and Germany. Elsewhere, Goldman Sachs once again reiterated its “conviction buy” of Nvidia Corporation (NASDAQ:NVDA) amid the stock’s recent decline. Finally, Deutsche Bank AG (USA) (NYSE:DB) disappointed investors by announcing that it will hold an $8.5 billion rights offering to raise capital.

Tuesday’s Vital Options Data: Facebook Inc (FB), Nvidia Corporation (NVDA) and Deutsche Bank AG (USA) (DB)

Facebook Inc (FB)

FB stock has quite the bullish following right now — even here at Investor Place, with the exception of Dana Blankenhorn, that is. But options traders on Monday were not so sure. FB stock saw volume jump to 301,000 contracts, with calls dipping to a below-average 58% of the day’s take.

That isn’t to say that this speculative group of investors doesn’t still want to be friends with FB stock, but the March put/call open interest ratio has risen in recent weeks to a considerably more cautious perch at 0.78 from a range near 0.61 earlier in the month.

And options traders have reason to be cautious, given the rising threat of overseas legislation and legal trouble aimed at Facebook. For instance, the company is facing copyright issues in Italy, hate-speech issues in Germany, and (of all things) sexualized images of children in the U.K. Clearly, as Dana Blankenhorn puts it, Facebook could have more problems than you think.

Nvidia Corporation (NVDA)

NVDA stock has fallen nearly 17% during the past month, and the decline has sparked a “should I stay or should I go” debate among many investors. But Goldman Sachs believes that the sell-off has been overdone, as the brokerage firm once again reiterated its “conviction buy” on NVDA stock yesterday with a $130 price target. It’s an opinion that both I and Investor Place’s Richard Saintvilus hold.

Apparently, NVDA options traders are also of the same mind. Despite the stock’s recent decline, NVDA calls remain in high demand. On Monday, volume rose to 279,000 contracts, with calls snapping up nearly 60% of the day’s take. What’s more, NVDA’s March put/call open interest ratio has fallen from a perch north of 1.0 to its current reading of 0.75, as calls are added at a faster rate than puts among near-term contracts.

The most popular strike is the ambitious March $110 call, where more than 22,000 contracts currently reside, while the more reasonable $105 strike sports call OI of nearly 10,000 contracts.

Deutsche Bank AG (USA) (DB)

Struggling Deutsche Bank needed to do something to shore up its operations, but investors are clearly not happy with the path the company has chosen. The German banking giant announced that it is issuing $8.5 billion worth of rights to fund its turnaround plan, potentially injecting about 687 million new DB shares into the market and creating a significant dilution problem for current shareholders.

DB options traders responded to the news by flooding the stock with put contracts on Monday. Total volume arrived at more than 243,000 contracts, with puts grabbing 55% of the day’s take. As a result, DB’s March put/call open interest ratio has extended its recent advance, rising to 0.75 as puts remain a favorite target for speculative investors.

What’s more, the April put/call OI ratio has ballooned even higher, reaching a near-term high of 2.17, with puts more than doubling calls among options set to expire within the next month.

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/2017/03/tuesday-vital-data-facebook-inc-fb-nvidia-corporation-nvda-and-deutsche-bank-ag-usa-db/.

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