Thursday’s Vital Data: Apple Inc. (AAPL), Ford Motor Company (F) and Procter & Gamble Company (PG)

Options activity provides a look at expectations on AAPL, F and PG

U.S. stock futures are mixed this morning, as Wall Street eyes the potential for a government shutdown this weekend. Immigration reform is a major sticking point however, as Republican leaders search for a way pass a short-term spending bill.

stock market todayOn the economic front, weekly jobless claims, December housing starts and the January the Philadelphia Fed’s manufacturing index are on tap.

Heading into the open, Dow Jones Industrial Average Futures are up 0.07%, S&P 500 futures have lost 0.03% and Nasdaq-100 futures have dipped 0.23%.

Turning to the options pits, volume backed away from Tuesday’s high but remained well above average. Overall, about 24.5 million calls and 17.1 million puts changed hands. The CBOE single-session equity put/call volume ratio continued to tick lower, arriving at 0.48. The 10-day moving average held at 0.55, its lowest level in three years.

Taking a closer look at yesterday’s options activity, Apple Inc. (NASDAQ:AAPL) saw increased call activity after announcing U.S. expansion plans. Meanwhile, Ford Motor Company (NYSE:F) lowered its 2018 earnings outlook, attracting mixed options volume. Finally, Proctor & Gamble Company (NYSE:PG) trades ex-dividend today ahead of next Tuesday’s quarterly report.

Wednesday’s Vital Options Data: Apple Inc. (AAPL), Ford Motor Company (F) and Procter & Gamble Company (PG)

Apple Inc. (AAPL)

Financial headlines touted that Apple would pay $38 billion in U.S. taxes. The company is apparently repatriating some of the $252.3 billion it holds in overseas accounts. Apple wouldn’t officially say how much. The company also said it would spend about $350 billion in the United States over the next five years.

The biggest driver for Apple stock, however, was likely analyst speculation that the U.S. investments would allow it to buyback more stock or pay increased dividends.

Options traders certainly love speculation, and AAPL stock was ripe for the picking yesterday. Volume soared to 623,000 contracts, or more than 1.6 times Apple’s daily average. Calls made up an above average 73% of the day’s take.

Looking ahead, the February put/call open interest ratio arrives at 0.61, with calls on the verge of doubling puts in the series. AAPL call traders have their sights set on the $180 strike, where more than 61,000 currently reside. As for put traders, the $170 strike is the most active, with 29,000 contracts open.

Ford Motor Company (F)

The F-150 may have “raised the bar” for pickup trucks in 2018, but Ford Motor just lowered the bar for this year’s earnings outlook. Yesterday, Ford said it expects 2018 operating income to fall to a range between $1.45 and $1.70 per share, down from $1.78 last year.

Ford also said it expects lower earnings from credit lending due to higher interest rates.

F stock options traders were not impressed. Volume vaulted to over 209,000 contracts, or nearly quadruple Ford’s daily average. Activity was split down the middle between puts and calls.

Options traders were already hedging their bets on Ford. The February put/call OI ratio rests at 1.17, with puts just outnumbering calls for the series. The most popular strikes are the $13 call, with 9,400 contracts, and the $12 put, with more than 10,000 contracts.

F stock is looking to rebound off support near $12 this morning.

Procter & Gamble Company (PG)

Procter & Gamble stock options were on fire yesterday. Volume rocketed to 169,000 contracts, arriving at more than 14 times PG stock’s daily average. Calls accounted for 95% of the day’s take.

We’ve seen this type of activity before, so it should come as no surprise that PG stock trades ex-dividend today. In other words, PG options traders are looking to capture dividends. PG stock holders of record as of the close yesterday are eligible for  a quarterly dividend of $0.6896 per share payable on Feb. 15.

That said, Procter & Gamble also reports earnings next Tuesday. Analysts are expecting a profit of $1.14 per share on revenue of $17.34 billion. The whisper number comes in at $1.16 per share. While most of yesterday’s activity was dividend related, look for increased options volume on PG heading into this event.

As of this writing, Joseph Hargett was long on General Electric Company (GE) stock.

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