Market News

TradeKing Midday Market Call Recap – SPX, DAL

Recap for Tuesday, November 11th by Kevin Corrigan

Did you miss Tuesday’s TradeKing Midday Market Call? Here’s a quick recap. Don’t miss another session, register here today!

Analysis of S&P 500 from QuickTakesPro’s Michael Kahn:

S&P 500 (SPX) – At the time of this broadcast, SPX was around 2038.75 up 0.49 today. It hit a 52 week high earlier today. It has moved well past its 50 day moving average of 1972.12 and it is above its 200 day moving average of 1919.70. Although it has been moving up to new highs, the Stochastic level of 99.36 suggests this could be overbought at this point. Still, the market is going up, so that is the trend.


The Chart of the Day is Delta Airlines (DAL) –
At the time of this broadcast, DAL was at 43.76, up 0.39 today. It fell a few weeks ago, possibly with some regard to the Ebola scare, but has since rebounded and been going up as oil has been dropping. As DAL has climbed up, the On Balance Volume (OBV) has been decreasing which may suggest there’s not a lot of momentum behind the rally. We could be seeing an exhaustion of this rally at its new highs.

It is above its 50 and 200 day moving averages of 37.93 and 36.79, respectively.


Analysis of DAL Volatility Chart and Dividends from TradeKing’s Brian Overby – 

DAL recently set a 52-week high (68%) in the 30-day implied volatility (IV) due to the big downturn in the stock price a few weeks ago. The stock price has bounced back and with that move, the IV has dropped precipitously to about 32%, which is quite a bit below the 30-day historical volatility (45%).  
DAL pays a 9 cents per share dividend that went ex-dividend last week and earnings is not expected until January 20, 2015, so neither should have an effect on option prices.


Technical tools used:

– Moving Averages
– Trendlines

Brian Overby’s paper trade strategies based on Michael’s analysis –

Michael’s analysis was short term bearish. Brian discusses two paper strategies, a longer term Long Put and a shorter term Long Put Spread with the December expirations. Both avoid the next scheduled earnings announcement on January 20, 2015. 

Brian’s Paper Trade – Long Put  – Buy 1 Dec 20 2014 DAL 43 Put
– 39 Days to expiration – Bid 1.53, Ask 1.57 for the option contract
– Debit is $ 1.57 if we get it at the Ask 
– Maximum potential loss: $ 1.57- Maximum potential gain $ 41.43 if the stock goes to zero (not likely to happen)
Total commission to enter this trade is $ 5.60

Brian’s Paper Trade – Long Put Spread – Buy 1 Dec 12 2014 DAL 45 Put- Sell 1 Dec 12 2014 DAL 42.50 Put
– 31 Days to expiration  – Net Bid 1.00, Mid 1.23, Ask 1.45 for the strategy
– Net Debit  is $ 1.23 if we get it at the Mid (which may not be possible) 
– Maximum potential loss: $ 1.27- Maximum potential gain: $ 1.23

Total commission to enter this trade is $ 6.25

**NOTE: option prices are given as a per contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs. 
TradeKing Options Tools used:

– Detailed Quote

– TradeKing Long Put

– TradeKing Long Put Spread

– TradeKing Volatility Charts

– TradeKing Options Pricing Calculator

– TradeKing Probability Calculator

– TradeKing P&L Calculator

Get solid market analysis and potential trading ideas. Take 15 minutes of your lunch with our team, as they analyze the market during this live online session. As an added bonus, a stock chart will be covered in detail each session accompanied by a potential option trade. This might be the most valuable thing you do all week! Every Tuesday midday from 12:00 – 12:15pm ET.

Don’t miss the next TradeKing Midday Market Call. Register here: www.tradeking.com/events

Regards,

Kevin Corrigan, PMP
VP Content and Social Media
www.tradeking.com

Options involve risks and are not suitable for all investors. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options, sent to you in previous communication. Additional copies may be obtained by calling TRADEKING at 877-495-KING or by visiting www.TradeKing.com/ODD.

Multiple leg options strategies involve additional risks and multiple commissions, and may result in complex tax treatments. Please consult a tax advisor.

At the time of publication and in the preceding month, TradeKing and/or Michael Kahn did not have ownership greater than 1% in any stocks mentioned; did not have any other actual, material conflict of interest known at the time of publication; have not received compensation from a public offering nor from investment banking services related to any companies mentioned within the past 12 months, nor expect to receive any in the next 3 months; nor engaged in market making in the securities mentioned.

System response and access times may vary due to market conditions, system performance, and other factors.

Any strategies discussed and examples using actual securities and price data are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell securities. Past performance is not a guarantee of future results. Consider the following when making an investment decision: your financial situation, your risk profile and transaction costs.

Market timing is a complex investment strategy which involves risk and may incur additional commission costs.

While implied volatility represents the consensus of the marketplace as to the future level of stock price volatility, there is no guarantee that this forecast will be correct.

TradeKing charges $ 4.95 for online equity and option trades, add 65 cents per option contract. TradeKing charges an additional $ 0.35 per contract on certain index products where the exchange charges fees. See our FAQ for details. TradeKing adds $ 0.01 per share on the entire order for stocks priced less than $ 2.00. See our Commissions + Fees page for commissions on broker-assisted trades, low-priced stocks, option spreads, and other securities.

The projections or other information generated by TradeKing’s tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The calculations do not take into consideration all costs, such as commissions and margin interest which may impact the results shown. It is the user’s sole responsibility to select the criteria to enter in the TradeKing’s tools, or to choose among the predefined screens, and to evaluate the merits and risks associated with the use of the tools before making any investment decisions. TradeKing is not responsible for any losses that occur from such investment decisions.

TradeKing Webinars and All-Star Blogs are provided for educational and informational purposes only.

All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. TradeKing provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice. You alone are responsible for evaluating the merits and risks associated with the use of TradeKing’s systems, services or products.

TradeKing selects and defines as All-Stars certain independent market commentators who are recognized industry personalities and experienced traders and who provide timely market commentary via the TradeKing All-Star Blog and/or TradeKing Webinars. Each All-Star commentator’s bio, related qualifications and disclosure as to their relationship with TradeKing can be found on the All-Star Roster. The selection of All-Star commentators is solely based on the quality and style of the content provided. TradeKing does not measure, endorse, or monitor the performance or correctness of any statement or recommendation made by independent All-Stars commentators. Supporting documentation for any claims made by TradeKing All-Stars will be supplied upon request by the author of the post, who is solely responsible for the views expressed. Contact TradeKing All-Stars by sending an email message to TKallstars@tradeking.com.

(c) 2014 TradeKing Group, Inc. All rights reserved.

Securities offered through TradeKing, LLC, member FINRA and SIPC.
market news – Bing News

Click to comment
Loading Facebook Comments ...

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top