Options Trading Invesors Caustious on Industrials

Options Trading Investors Trade Ford, But Are Cautious on Industrials

(Wall Street Journal)

This week, some options trading investors were trading Ford Motor in order to have a short-term rise while other options trading investors were being cautious over the whole industrial sector.

Options trading analysts have noted that options trading investors had flashed reticence over holding any long options trading positions in growth sectors such as industrials and energy. Instead, options trading investors are favoring defensive sectors such as consumer staples, health care and utilities. Options trading investors are also continuing to chase any profit that can be found in an individual stock.

With regards to Ford, options trading investors have sought to own “calls” that give them the right to buy shares for $15 by the middle of June. Ford recently closed at $15.12 but it should also be noted that Ford has lost nearly 10% this year.

Nevertheless and in paying 47 cents for each of the options trading contracts, options trading investors can profitably swap the contracts for Ford shares should they rise about 2% in the next month.

Meanwhile, bullish options trading investors continued to buy calls on Bank of America with about 21,000 calls to buy shares for $12.50 by January being traded. In addition, bullish options trading activity has also surrounded other banking stocks such as BB&T, J.P. Morgan Chase, Morgan Stanley, US Bancorp and Wells Fargo – despite the fact that Financials have been the worst-performing sectors on the Standard & Poor’s 500 stock index so far this year.

OptionsXpress Retail Options Trading Volume Rises 8%

(MarketWatch)

OptionsXpress Holdings Inc. has just reported that their retail options trading volume rose 8% for April as compared to a year earlier and was also up 2% from March of tis year. The company also added a net of 3,300 options trading accounts last month and ended the month with 329,600 total options trading accounts – up 9% from a year earlier as well as 1% higher from March.

However, OptionsXpress also reported that its smaller institutional segment had daily average revenue trades fall 20% compared with a year earlier as well as 9% from March.

Retail options trading investors are thought to account for as much as one-fifth of all US stock options trading. Hence, OptionsXpress gives light on the state of US retail options trading,

Moreover and in March, Charles Schwab Corp. agreed to purchase OptionsXpress in a $1 billion stock deal as derivatives options trading volume has remained strong in comparison to stocks.

Options Trading Pullback Predicts a US Dollar Rally

(DailyFX)

A strong pullback in FOREX options trading sentiment along with forex futures positioning give support to predictions for continued US Dollar strength against other major currencies such as the the Australian Dollar, British Pound, Canadian Dollar and Euro.

Specifically, FOREX options trading investors have aggressively pulled back on bets that the US Dollar will remain weak while similar reversals in key USD pairs appear to point to a Greenback bottom.

Category: OPTIONS BASICS