Thursday’s Vital Data: General Electric Company (GE), United Pacific Corporation (UNP) and Tesla Inc (TSLA)

U.S. stock futures are heading higher this morning, as Wall Street looks to economic data and rising energy prices for inspiration. Crude oil futures are trending higher this morning after U.S. inventory data yesterday revealed an unexpectedly large decline in supply last week. Meanwhile, weekly jobless claims, advance November trade goods and the Chicago purchasing managers index arrive on the economic data front.

Heading into the open, futures on the Dow Jones Industrial Average are up 0.14%. S&P 500 futures have added 0.07% and Nasdaq-100 futures have added 0.24%.

Turning to the options pits, Wednesday’s volume was anemic, with about 11.1 million calls and 8.5 million puts changing hands. The CBOE single-session equity put/call volume ratio fell to 0.55 and the 10-day moving average ticked higher to 0.57.

Taking a closer look at Wednesday’s options activity, General Electric Company (NYSE:GE) saw heavy volume after upping its stake in 3D printing company Arcam Aktiebolag. Meanwhile, United Pacific Corporation (NYSE:UNP) was flooded with call volume following a breakout above technical resistance. Finally, Tesla Inc (NASDAQ:TSLA) volume was mixed after KeyBanc slashed it’s Model 3 estimates.

General Electric Company (GE)

GE sparked a bit of excitement from investors yesterday when it upped its stake in 3D printing company Arcam Aktiebolag to 95% from 77%. GE also noted that it would  eventually will take complete ownership of the Swedish company.

General Electric said it views the acquisition as additive to its current businesses, as 3D printing is used in everything from jet engine parts to medical instruments.

GE options traders appeared to view the news in a positive light. Volume ticked higher to 214,000 contracts, with calls accounting for 59% of the day’s take.

However, GE’s January 2018 put/call open interest ratio rose from 0.50 yesterday to 0.53 today. In other words, puts were added at a faster rate than calls in the front-month series, signalling a bearish shift in sentiment.

United Pacific Corporation (UNP)

Stock in railroad company United Pacific extended its recent tear higher on Wednesday, breaking out above former resistance at $135. UNP stock has soared nearly 36% higher since bottoming near $100 in late July.

Continued economic growth in the U.S. and a strong industrial sector have helped push UNP steadily higher. United Pacific also pays out its quarterly dividend today — 66.5 cents to shareholders of record as of the close on Nov. 30 — so this could also help explain yesterday’s surge in options volume.

Overall, UNP volume soared to 121,000 contracts, or more than five times the stock’s daily average options activity. Calls accounted for 96% of the day’s take.

Options traders are surprisingly bullishing on UNP heading into January. Currently, the January 2018 put/call OI ratio rests at a lowly 0.35, with calls nearly tripling puts among front-month options.

Tesla Inc (TSLA)

TSLA shares fell 1.78% on Wednesday after KeyBanc slashed its estimates for Model 3 deliveries. KeyBanc now expects just 5,000 Model 3s to arrive in the fourth quarter, down from prior expectations of 15,000 units. Analysts expect Tesla delivery and production numbers to arrive within the next week or so.

TSLA options traders were mixed on the news. Volume came in at 118,000 contracts, with calls making up just 54% of the day’s take. Overall, TSLA’s January 2018 put/call OI ratio rests at 1.47, with puts easily outnumbering calls among front-month options.

Peak put OI for the series totals 19,600 contracts at the deep-in-the-money $250 strike, while peak call OI numbers nearly 14,000 at the overhead $400 strike.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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