Friday’s Vital Data: Twitter, Apple and Boeing

Options activity provides a look at expectations on TWTR, AAPL and BA

U.S. stock futures are trading lower this morning as the pullback looks to continue into its third consecutive trading session.

Friday's Vital Data: Twitter (TWTR), Apple (AAPL) and Boeing (BA)Heading into the open, futures on the Dow Jones Industrial Average are down 0.47% and S&P 500 futures are lower by 0.52%. Nasdaq-100 futures have shed 0.81%.

In the options pits, calls once again outpaced puts despite the price decline. Overall volume lifted to above-average levels. Specifically, about 20.2 million calls and 18.7 million puts changed hands on the session.

The uptick in put activity left a mark at the CBOE, with the single-session equity put/call volume ratio ramping to 0.7 — a two-week high. Meanwhile, the 10-day moving average held its ground at 0.62.

Options traders zeroed in on stocks with looming dividend payouts. Apple (NASDAQ:AAPL) and Boeing (NYSE:BA) calls were active ahead of their ex-dividend dates. Elsewhere, Twitter (NYSE:TWTR) saw renewed options interest after its shares were slammed on weaker-than-expected revenue guidance.

Let’s take a closer look:

Twitter (TWTR)

The choppy, sloppy base in Twitter unfortunately looks to continue after the company reported earnings. TWTR stock fell 9.8% on Thursday amid heavy trading. The descent is unfortunate because Twitter’s price chart was improving and testing the upper end of its range ahead of the event.

For the fourth quarter, the company earned 31 cents per share on revenue of $909 million. Both measures topped estimates, but weaker-than-expected forward guidance soured trader sentiment. Another development driving investor angst was Twitter saying it won’t be communicating its monthly active users (MAU) after the first quarter of 2019.

On the options trading front, calls popularity won the day. Activity swelled to 367% of the average daily volume, with 344,984 total contracts traded. 63% of the trading came from call options.

With the post-earnings volatility crush, implied volatility plunged to 49%, or the 31st percentile of its one-year range. Premiums are now pricing in daily moves of 95 cents, or 3.1%.

Apple (AAPL)

All was quiet in the news for Apple yesterday, but its options were hopping anyways. The excitement was likely a byproduct of the stock trading ex-dividend today. Shareholders are gearing up for getting paid the next 73 cents quarterly dividend. With AAPL currently trading at $170.94, that translates into an annual dividend yield of 1.71%.

On the options trading front, traders aggressively came after calls. Total activity grew to 194% of the average daily volume, with 1,032,396 total contracts traded. Calls accounted for 71% of the day’s take.

Implied volatility traded sideways on the day, remaining at 25% or the 29th percentile of its one-year range. Premiums are pricing in daily moves of $2.64 or 1.5%.

Boeing (BA)

Boeing’s recent price breakout to record highs has been the talk of the town. But it was its quarterly dividend that likely landed it atop the most-actives list. BA stock traded ex-dividend yesterday with the shares pricing out the next quarterly payment of $2.05. Based on Thursday’s closing price of $405.17, the dividend works out to an annual yield of 2.03%.

Boeing’s price chart is worth bragging about. With the fresh earnings-driven breakout, the stock has officially departed its one-year range and should continue trending higher. It’s one of the strongest large-caps in the land right now.

On the options trading front, calls dominated the day. By the time the closing bell rang, total activity had climbed to 168% of the average daily volume, with 100,398 total contracts traded. Calls added 60% to the tally.

Implied volatility has been brought low post-earnings. It now sits at 27%, or the 24th percentile of its one-year range. Premiums are pricing in daily moves of $6.86, or 1.7%.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.


Article printed from InvestorPlace Media, https://investorplace.com/2019/02/fridays-vital-data-twitter-apple-and-boeing/.

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