U.S. stock futures are trending cautiously higher this morning, as Wall Street waits for the release of September jobs data. The latest non-farms payroll data is expected to show that the U.S. added just 75,000 jobs in September, down sharply from 156,000 in August. The unemployment rate is expected to remain unchanged at 4.4%.
Heading into the open, futures on the Dow Jones Industrial Average are off by 0.04%, S&P 500 futures have added 0.05% and Nasdaq-100 futures are higher by 0.06%.
In the options pits, volume was brisk ahead of today’s jobs data. Overall, about 17.2 million calls and 13.3 million puts changed hands, driven largely by a series of dividend capture plays amid corporate payouts. On the CBOE, the single-session equity put/call volume ratio rose to 0.69, while the 10-day moving average ticked higher to 0.64.
Taking a closer look at Thursday’s volume, MannKind Corporation (NASDAQ:MNKD) saw call options volume spike after it won a labeling battle with the Food and Drug Administration that should boost sales of its inhalable insulin product Afrezza. Elsewhere, Apple Inc. (NASDAQ:AAPL) is investigating another report of battery bloating in it’s new iPhone 8 and 8 Plus smartphones, while Netflix, Inc. (NASDAQ:NFLX) calls jumped after the company said it was raising prices once again.
MannKind Corporation (MNKD)
MNKD stock has rocketed more than 111% higher this week, after MannKind said it won a labeling concession from the FDA on its Afrezza inhalable insulin product. Afrezza’s labels will now include data showing that the first measurable effects start within 12 minutes of use, with peak effects about 35 minutes to 45 minutes after. Marketing has been an issue for MannKind’s insulin product, and it believes this new labeling should help boost sales.
MNKD options traders were slow to react, allowing the stock to rally throughout the week. But they showed up en mass yesterday amid MNKD’s biggest move, with volume soaring to 179,000 contracts — a near-term high and more than 13 times the stock’s average daily options volume.
Furthermore, there doesn’t appear to have been any institutional activity amid MNKD’s volume spike. According to Trade-Alert.com, there were not option blocks bigger than 10,000 contracts traded on MannKind yesterday. That said, such activity would have been massive for MNKD, as there are only about 22,000 contracts in open interest for the entirety of the October series.
A closer look at MNKD’s October options configuration indicates a heavily bullish sentiment backdrop. Currently, the front-month put/call open interest ratio for MNKD rests at 0.34, with calls nearly tripling puts for the series.
Apple Inc. (AAPL)
Another report of battery bloating has emerged for Apple’s new iPhone 8 and iPhone 8 Plus smartphones. Following on the heels of reports in Taiwan and Japan, a Chinese customer reported that his new iPhone 8 Plus arrived cracked open on Oct. 5. Pictures reportedly show the battery swollen and the casing popped at the seams. Apple says it is investigating the reports.
So far, AAPL traders are largely ignoring these reports, as there are currently less than a handful. In fact, Apple options traders are full-steam-ahead on the shares, sending more than 336,000 contracts across the tape yesterday. Calls made up 57% of the day’s take, well below the average call percentage of 62%.
Sentiment has dulled on AAPL stock since the iPhone release event, with options traders taking the lead. Currently, the October put/call open interest ratio rests at 0.65. While this may seem like a bullish reading, it is actually up from readings in the low 0.50 range taken before the iPhone launch event. Like reports of battery bloating, investors would do well to keep an eye on this sentiment reading should it continue to worsen.
Netflix, Inc. (NFLX)
In a move likely to help cover the cost of developing new content, Netflix announced yesterday that it was raising prices once again. The bottom tier Netflix plan will remain untouched at $7.99 per month, but the mid-tier and top-tier plans will jump from $9.99 to $10.99 and from $11.99 to $13.99, respectively.
In a statement, Netflix said, “From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features and improve the overall Netflix experience to help members find something great to watch even faster.”
Traders viewed the price hike bullishly for NFLX, as the stock rose more than 5% on the news. Furthermore, options traders piled into call options. Volume topped 336,000 contracts, more than tripling NFLX’s daily average. Additionally, calls made up 62% of the day’s take.
Those calls had a significant effect on NFLX’s October put/call open interest ratio as well. This reading dropped from yesterday’s perch at 1.25 to today’s reading of 1.15. In short, calls were added at a considerably faster pace than puts in the past 24 hours, hinting that the shift toward a bullish sentiment backdrop for the shares is picking up steam.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
