U.S. stock futures are pointed sharply lower this morning, as Wall Street retreats ahead of another round of economic data following yesterday's mixed outlook.
With both the Federal Reserve and the Bank of Japan holding policy meetings next week, investors are understandably nervous. As such, futures on the Dow Jones Industrial Average have dropped 0.43%, with S&P 500 futures falling 0.46% and Nasdaq-100 futures off 0.33%.
Thursday's options activity saw a return to call volume, but that may well be erased in today's trading. Overall, 18.3 million calls and 15.8 million puts changed hands on the session. Meanwhile, put volume rose sharply on the CBOE, where the single-session equity put/call volume ratio whipsawed from a two-week low on Wednesday to a one-week high of 0.70 yesterday. Still, the 10-day moving average held at 0.64.
Providing fuel for Thursday's options volume, Facebook Inc (NASDAQ: FB ) continued to ride Goldman Sach's "Focus List" designation as it announced that its new $2.5 billion data center would be built in New Mexico. Elsewhere, Oracle Corporation (NASDAQ: ORCL ) call options were popular ahead of last night's quarterly report - where earnings and revenue came up short of expectations. Finally, Bank of America Corp (NYSE: BAC ) continued to see heavy call option speculation ahead of next week's Federal Open Market Committee meeting on monetary policy.
Facebook Inc (FB)
FB stock has received a bit more attention this week from options traders after Goldman Sachs added the shares to its Focus List on Wednesday . Goldman was already bullish on FB stock, maintaining a "buy" rating and a $162 price target. In a lesser story for FB, Facebook has finally decided to build its $2.5 billion data center in New Mexico , narrowing down the list to either Los Lunas and West Jordan.
FB stock option volume rose to above average levels on Thursday, with more than 359,000 contracts changing hands on the session. Furthermore, calls accounted for the bulk of the activity, snapping up roughly 66% of the day's take.
However, short-term expectations are rather bearish by comparison. In fact, the weekly Sept 23 series put/call open interest ratio for FB stands at a lofty 1.19, with puts outnumbering calls by a fair margin. Peak put OI for the series totals 9,900 contracts at the $125 strike, with another 9,200 contracts open at $123.
For the latter options to trade in the money, FB would need to fall more than 4% within the next week.
Oracle Corporation (ORCL)
Call options were favored among ORCL short-term traders heading into last night's quarterly earnings report - though put options may have been the smart money. Total volume rose to 260,000 contracts, marking a rare appearance for ORCL on the top ten most active options listing. Calls made up 58% of all contracts traded on the session, with peak September OI totaling 26,000 contracts at the $42 strike.
Hitting $42 would seem rather unlikely today, however, as ORCL stock is down more than 2.5% in premarket action following last night's disappointing quarterly report. For the quarter, Oracle said it earned 55 cents per share on revenue of $8.6 billion, missing analysts' expectations for earnings of 58 cents per share on sales of $8.7 billion.
Bank of America Corp (BAC)
As I said earlier this week , an interest rate hike is coming - maybe not next week, but the Fed will raise rates. And interest-rate-sensitive stocks like Bank of America stand to benefit from the move. For now, however, BAC stock is chopping around in the $15.50-$16 region, while playing tag with its 10-day and 20-day moving averages. BAC stockholders appear to be on hold heading into next week's FOMC meeting on U.S. monetary policy.
Options traders, however, appear to be on the march. Total volume for BAC stock yesterday rose to 325,000 contracts, with calls accounting for a hefty 76% of the day's take.
Looking ahead to next week's OI configuration, some 113,000 calls have accumulated at the weekly September 23 series $16.50 call strike, with 76,000 open at the $16 strike. By comparison, peak put OI for the series totals just 20,000 contracts at the $15 strike.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
More From InvestorPlace
- 5 Simple Mistakes That Could Ruin Your Retirement
- 7 Energy Stocks You Can Actually Trust in Retirement
The post Friday's Vital Data: Facebook Inc (FB), Oracle Corporation (ORCL) and Bank of America Corp (BAC) appeared first on InvestorPlace .