US Markets

Friday’s Vital Data: Costco Wholesale, Advanced Micro Devices and Tesla

U.S. stock futures are circling unchanged this morning. Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.12% and S&P 500 futures are higher by 0.08%. Nasdaq-100 futures have added 0.15%.

Friday's Vital Data: Bed Bath & Beyond, CVS and Merck

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Put volume dominated the options pits for the second day in a row, outpacing calls by a wide margin. Approximately 18.4 million calls and 20.3 million puts changed hands on the session.

However, the gap between both failed to match Wednesday’s panic-induced levels at the CBOE. The single-session equity put/call volume ratio fell back to 0.77. Meanwhile, the 10-day moving average rallied yet again with a push toward 0.72.

Options trading was hot in Costco Wholesale (NASDAQ:), Advanced Micro Devices (NASDAQ:) and Tesla (NASDAQ:) among others.

Let’s take a closer look:

Costco Wholesale (COST)

Costco Wholesale stepped up to the earnings plate last night, and the stock’s response has thus far been remarkably muted. Shareholders hoping for fireworks left disappointed, but the avoidance of a terrible number in the stock after hours should be viewed as a win.

In early morning trading, COST stock is trading down a slim 1.18%, which essentially erases yesterday’s gains.

Analysts were looking for the discount grocery chain’s earnings-per-share to climb 8% to $2.54. Revenue was estimated to come in at $47.12 billion. The company reported EPS of $2.69 when excluding a 22 cents per share expense due to a tax assessment. Revenue grew to $47.5 billion.

Traders will want to watch support at $282 carefully. A break below that in today’s trading will push the stock below its 50-day moving average and reverse the short-term uptrend.

On the options trading front, calls proved more popular than puts. Total activity ramped to 378% of the average daily volume, with 112,558 contracts traded. Calls added 60% to the tally.

Implied volatility was running hot into the number at 31% or the 82nd percentile of its one-year range. The expected earnings gap was $11 or 3.8%, so this morning’s 1% drop came in well within expectations. Premium sellers should wake to a big win.

Advanced Micro Devices (AMD)

Advanced Micro Devices has long been a favorite among momentum traders. Its high beta uptrend is littered with profit potential. But lately, AMD stock has turned boring. Its steady drip lower finally stopped Thursday with a vigorous bullish reversal candle.

The timing for the turnabout was fortuituous because it prevented AMD from falling below its 200-day moving average. In the short run, a run towards the 50-day near $30.50 could be in the cards.

Thursday’s ramp ginned up some excitement among options traders. Calls dominated the session, accounting for 73% of the session’s sum. Total activity swelled to 136% of the average daily volume, with 340,643 contracts traded.

Implied volatility drifted on the day at 59% and remained at the 32nd percentile of its one-year range. Premiums are baking in daily moves of $1.06 or 3.7%.

Tesla (TSLA)

Tesla shares were taken out at the knees yesterday, falling as much as 7% after the company reported underwhelming vehicle production numbers for the third quarter. The electric carmaker said they produced 96,155 cars and delivered 97,000 over the three months. The Street was looking for upwards of 100,000 to roll off the assembly lines.

Fortunately for Tesla, the gap lower came on a day where buyers were in a good mood. With stocks rallying en mass elsewhere, TSLA stock was buoyed up, paring the day’s losses to only 4%.

From a technical perspective, the stock chart is a mess. Ever since July’s disappointing earnings release, TSLA has been stuck in a range between $250 and $210. Until we break either side, steer clear of directional trades.

    On the options trading front, puts were the hot ticket. Activity climbed to 204% of the average daily volume, with 396,402 total contracts traded; 55% of the trading came from put options alone.

    Implied volatility slipped to 56% or the 19th percentile of its one-year range. Premiums remain cheap and are baking in daily moves of $8.19 or 3.5%.

    As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. For a free trial to the best trading community on the planet and Tyler’s current home, ! 

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