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Friday’s Vital Data: Microsoft, Apple and Energy Transfer Partners

options - Friday’s Vital Data: Microsoft, Apple and Energy Transfer Partners

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U.S. stock futures are trading modestly higher this morning. Sentiment on Wall Street is being boosted by follow-through buying on Apple (NASDAQ:AAPL), which hit a $1 trillion market cap yesterday following earnings.

However, there is some trepidation in the air ahead of today’s July non-farm payrolls report. Economists project that the U.S. economy added 194,000 new jobs in July. The unemployment rate is expected to drop to 3.9%.

At last check, futures on both the Dow Jones Industrial Average and the S&P 500 are up 0.11%. Nasdaq-100 futures, meanwhile, have added 0.14%.

In options activity, volume was brisk on Thursday. Overall, about 21.5 million calls and 17.2 million puts changed hands on the session. Over on the CBOE, the single-session equity put/call volume ratio dropped to 0.58. The 10-day moving average ticked lower to 0.64.

Options traders were keen on Apple once again with AAPL stock becoming the first U.S. company ever to hit a $1 trillion valuation. Meanwhile, Microsoft (NASDAQ:MSFT) was also popular with call traders following a Gartner report on cloud services rankings. Finally, Energy Transfer Partners (NYSE:ETP) was flooded with unusual activity after announcing a merger with Energy Transfer Equity (NYSE:ETE).

Let’s take a closer look:

Friday’s Vital Options Data: Microsoft, Apple and Energy Transfer Partners

Microsoft (MSFT)

According to Gartner, Microsoft is now the No. 2 cloud services provider in the world — just behind Amazon (NASDAQ:AMZN). What’s more, Gartner said that Microsoft’s infrastructure as a service (IaaS) offerings are growing at a much faster rate than Amazon.

MSFT stock gained about 1.2% on the news, while options traders loaded up on MSFT calls. Volume yesterday rose to 212,000 contracts, with calls claiming a sizeable 69% of the day’s take.

Looking out to September, we find that there is still room for bullish sentiment to grow on Microsoft. Currently, the September put/call open interest ratio rests at 0.73. Look for this reading to trend lower over the next month as optimism rises on MSFT stock.

Apple (AAPL)

Apple officially became the U.S.’s first $1 trillion company yesterday. The stock closed above the $207.04 threshold needed to top the $1 trillion market (assuming the company’s outstanding share count hasn’t budged since the most recent report on July 20). Stronger-than-expected Apple earnings provided the impetus for the rally.

Options traders appeared caught up in the bullish ferver. Volume skyrocketed to 1.7 million contracts on Thursday, nearly quintupling AAPL’s daily average. Calls claimed 63% of the day’s take.

That said, options traders appear to be anticipating a pullback from AAPL stock. Specifically, the August put/call OI ratio comes in at a lofty 1.4 reading, while the September put/call OI ratio rests at 0.93. That’s a lot of put open interest for a company that just hit $1 trillion. Maybe options traders are pricing in a sell-on-the-news event following this milestone.

Energy Transfer Partners, L.P. (ETP)

ETP stock soared 14% yesterday after news broke that the company was merging with Energy Transfer Equity. The deal exchanges 1.28 shares of ETE stock for each share of Energy Transfer Partners stock, and it does not include ETP stock held by ETE or its subsidiaries.

ETP’s options pits lit up after the news. More than 705,000 contracts traded on Energy Transfer Partners, pushing volume to 97 times the stock’s daily average. Calls claimed 97% of the day’s take, as traders looked to arbitrage the pending merger deal.

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

Article printed from InvestorPlace Media,

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