Thursday’s Vital Data: Intel, Netflix and Freeport McMoRan

Options activity provides a look at expectations on INTC, NFLX and FCX

U.S. stock futures are rallying into the open this morning.

Thursday's Vital Data: Intel, Netflix, and Freeport McMoRan
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Futures on the Dow Jones Industrial Average are up 0.17% and S&P 500 futures are higher by 0.22%. Nasdaq-100 futures have added 0.18%.

Resistance near last year’s peak flexed its muscles Wednesday, thwarting the market rally. In the options pits, calls continued to dominate and overall volume climbed to above-average levels. Specifically, about 19.1 million calls and 14.6 million puts changed hands on the session.

Meanwhile, over at the CBOE, the single-session equity put/call volume ratio fell to 0.55. The 10-day moving average continued hovering near 0.60.

Options traders swarmed in the following stocks: Intel (NASDAQ:INTC), Netflix (NASDAQ:NFLX) and Freeport McMoran (NYSE:FCX)

Let’s take a closer look:

Intel (INTC)

In yesterday’s vital data we highlighted the unexpected settlement between Apple (NASDAQ:AAPL) and Qualcomm (NASDAQ:QCOM) that sent QCOM stock skyrocketing. It turns out Intel was another beneficiary to the news. With AAPL officially befriending Qualcomm for all of its 5G needs, Intel decided to abandon its efforts at developing cellphone modems designed for 5G internet.

Rather than punishing Intel for the lost opportunity, investors are rewarding the chipmaker for exiting what was likely to be an unprofitable venture.

With Wednesday’s 3.26% gain, INTC stock closed at a fresh 19-year high. Its uptrend is on solid footing heading into next week’s earnings announcement.

On the options trading front, calls ruled the roost. Activity swelled to 447% of the average daily volume, with 280,589 total contracts traded. Calls claimed 63% of the day’s take.

The pre-earnings volatility ramp continued with a rise to 31% or the 44th percentile of its one-year range. Premiums are pricing in daily moves of $1.14 or 1.9%.

Netflix (NFLX)

Netflix entered its earnings release with the specter of Disney’s (NYSE:DIS) Disney Plus hanging over its head. Fortunately for the streaming king, its quarterly numbers were sufficient to lay investor fears to rest for now. NFLX stock ended the day down 1.31%, which is an extremely quiet reaction compared to some of its monster gaps from past quarters.

For the first quarter, Netflix earned 76 cents per share compared to analyst expectations of 57 cents. Revenue also came in above expectations at $4.52 billion versus 4.50 billion.

On the options trading front, calls outpaced puts by a slim margin despite the day’s descent. Total activity climbed to  241% of the average daily volume, with 392,668 contracts traded. Calls accounted for 55% of the sum.

Traders were baking in an earnings gap of 6.5%, so the 1.31% slide came in well below expectations. Chalk this quarter up to a massive win for volatility sellers.

Freeport McMoRan (FCX)

FCX stock was percolating on Thursday as traders jockeyed for positions ahead of its earnings announcement. The copper and gold company traded up 5% before profit-taking slammed it back to unchanged on the day.

This year’s recovery has taken FCX shares up some 40% to reclaim the high side of its 200-day moving average. The 20-day and 50-day moving averages are also rising loyally beneath to confirm buyers have wrested control of the short- and intermediate-term trends. Bulls shouldn’t rest on their laurels, however. The past four earnings announcements have generated intense selling pressure. Here’s to hoping next week’s event doesn’t undo this year’s progress.

On the options trading front, traders came after calls with a vengeance. Activity jumped to 385% of the average daily volume, with 192,024 total contracts traded. 86% of the trading came from call options alone.

Implied volatility rallied to 47% placing it at the 36th percentile of its one-year range. Premiums are pricing in daily moves of 42 cents or 3%.

As of this writing, Tyler Craig held neutral options positions in Disney. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

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