Friday’s Vital Data: Alibaba Group Holding Ltd (BABA), Monsanto Company (MON) and Tesla Inc (TSLA)

U.S. stock futures are wavering around even this morning. Wall Street is digesting more political uncertainty out of Washington ahead of a slew of economic reports. Reports emerged yesterday that President Donald Trump has decided to replace national security advisor Lt. Gen. H.R. McMaster after firing Secretary of State Rex Tillerson (via Twitter, no less).

Friday’s Vital Data: Alibaba Group Holding Ltd (BABA), Monsanto Company (MON) and Tesla Inc (TSLA)

On the economic front, February housing starts, building permits, industrial production and capacity utilization will hit this morning. The University of Michigan’s consumer sentiment index for March is also on tap.

Finally, the Federal Reserve kicks off another monetary policy meeting next week. The fed-fund futures market are pricing in a 91.6% chance of a 0.25 percentage point rate increase on March 21.

Heading into the open, Dow Jones Industrial Average futures are flat S&P 500 futures are up 0.1% and Nasdaq-100 futures are up 0.04%.

Turning to the options pits, volume was pretty average on Thursday. Overall, about 18.7 million calls and 17.4 million puts changed hands. The CBOE single-session equity put/call volume ratio dipped to 0.63. The 10-day moving average held at 0.61.

Taking a closer look at yesterday’s options activity, Alibaba Group Holding Ltd (NYSE:BABA) volume jumped on news the company was planning on a Shanghai exchange listing. Monsanto Company (NYSE:MON) was flooded with options volume after the U.S. Justice Department expressed concern on the Bayer AG buyout. Finally, Tesla Inc (NASDAQ:TSLA) is facing production issues, again.

Friday’s Vital Options Data: Alibaba Group Holding Ltd (BABA), Monsanto Company (MON) and Tesla Inc (TSLA)

Alibaba Group Holding Ltd (BABA)

China’s technology companies have become international rockstars in the past couple of years. But many are not listed on the country’s home exchange in Shanghai. China is pushing incentives to bring these companies home, and Alibaba announced plans to do just that. The Shanghai listing would come three years after BABA made its debut on the NYSE.

Alibaba stock options traders chased the news and BABA stock, which flirted with $200 on Thursday. Volume on BABA rose to 496,000 contracts, with calls snatching up 71% of yesterday’s take.

That said, BABA stock options traders have a ways to go before sentiment hits extreme bullish levels. Currently, the April put/call open interest ratio comes in at 0.83, with puts and calls in near parity. Look for this ratio to shift sharply lower should BABA stock take out $200.

Monsanto Company (MON)

Bayer AG’s $66 billion buyout offer for Monsanto is in jeopardy. The U.S. Justice Department said it wasn’t satisfied with Bayer’s current proposal to sell off businesses to meet antitrust benchmarks. In other words, Bayer would have to sell off more holdings to gain approval, putting the deal in question.

Monsanto stock dropped nearly 5% on the news, and options traders flooded the stock with activity. Volume rocketed to 199,000 contracts, coming in at more than 34 times MON’s daily average. Options players didn’t pick sides, though, as calls and puts were nearly split down the middle.

A close look reveals several block trades in the July series for Monsanto stock. reports that blocks of 10,000 contracts traded on the July $110 put, $125 call and $120 call. The latter was bought to open, while the $110 put and $125 calls were sold.

Tesla Inc (TSLA)

CNBC reported yesterday that Tesla is once again facing production issues for the Model 3. In its move to ramp up production, Tesla employees say the company has a high ratio of flawed parts and vehicles that need rework and repairs.

The CNBC report also claims that Tesla has shipped flawed parts to remanufacturing facilities to avoid scrapping them. Tesla denies the allegations.

On the news, put volume rose on Tesla stock. Total volume came in at 134,000 contracts, with puts making up 56% of the day’s take.

That said, negativity is nothing new for TSLA. The stock’s April put/call OI ratio has ballooned to a lofty reading of 1.78, with puts nearly doubling calls among back-month options.

As of this writing, Joseph Hargett held no positions on the aforementioned securities.

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