From the monthly archives:
Gross Domestic Product for the fourth quarter was estimated to have fallen 3.8%. Though this is the biggest decline since 1982, it “beat” the projected 5.5% decline. S&P futures in premarket trading spiked 1% on the release, suggesting a neutral market open.
Analysts point to a build in inventories of 1.3% [...]
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I went back and looked at the financial 3X Bull (FAS) and 3X Bear (FAZ) ETFs since their inception November 6th. They are established to give 3X leverage to the daily returns of the Russell 1000 Financial Services Index (RIFIN) . Here are the numbers I got back…
RIFIN – Fell from 703.19 to [...]
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A couple of months ago, I wrote a blog warning people to be careful trading 3x ETF products. Today would be an example of why. Take a look at 3x leverage financial ETFs, Financial Bull 3x (FAS) and Financial Bear 3x (FAZ).
They each moved more than 30% today – FAS was [...]
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I am not a technical trader, but the 850-852 level that the S&P 500 Index (SPX) has blown through is regarded by many as a layer of “resistance,” and we keep hearing about it.
Excitement over the government’s idea to purchase bad assets from banks has driven financials up 10% and the overall [...]
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Also hitting the hotlist this morning is Cemex (CX $8.77 +0.33). It appears as though a customer just bought a risk reversal, or collar.
This trade likely crossed the tape as a spread where the customer bought 10,000 Feb 7.5 puts and financed them with a sale of 10,000 10-strike calls. The [...]
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Banks are the early winners this morning after the FDIC announced plans for creation of a “Bad Bank” to take toxic assets off of beleaguered banks’ balance sheets. State Street (STT $25.17 +5.55) is one bank hitting the OptionsHouse Hotlist this morning – currently it is up 28%! Remember, this stock traded under [...]
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The 2-year swap rate is much lower today, at 54 basis points. This rate is the difference between Bank debt and U.S. Treasuries for the same term. The current spread is much lower (back down to levels seen in August 2007), which may show a return to “normalcy” in this indicator, which can [...]
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A story on Bloomberg today discusses the 90-day commercial paper companies had sold to the Federal Reserve under the Commercial Paper Funding Facility in October. About $220 billion is coming due this week, and analysts are optimistic that it will be rolled to buyers in the private sector.
Currently, AA-rated commercial paper is [...]
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Here are two great examples of takeover news and the impact on option volume.
Rohm and Haas (ROH $55.66, -10.16) and Biogen (BIIB $48.76, +1.34) are both showing up this morning on the OptionsHouse Options Hotlist with large volume (as compared to open interest).
On BIIB, the January 2010 April 50 put spread traded 10,000 times at [...]
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S&P futures are currently more than 2% lower this morning. General Electric (GE) reported a substantial drop in profits, and their stock is lower than $13 in pre-market trading. GE did seem to meet investor expectations for the quarter, which were bad. The decline is simply in line with the rest of [...]
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