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Monday’s Vital Data: Tesla Motors Inc (TSLA), J C Penney Company Inc (JCP) and Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

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U.S. stock futures are pointed higher this morning, as Wall Street searches for options to extend Friday's modest gains. Rising oil prices are providing the underpinnings this morning, while much of today's carry-over buying stems from a weak U.S. jobs report and the prospect of delayed rate hikes from the Fed.

Heading into the open, futures on the Dow Jones Industrial Average and the S&P 500 are up 0.23%, with Nasdaq-100 futures gaining 0.25%.

Options volume extended its recent rise on Friday, with weekly May 6 series expiration and Fed speculation helping to drive activity. Puts gained in popularity once again amid uncertain economic prospects, as the CBOE single-session equity put/call volume ratio soared to a four-month high of 0.92. As a result, the 10-day moving average tagged a three-month high of 0.74.

In equity option news, Tesla Motors Inc (NASDAQ: TSLA ) saw renewed put volume as traders doubted the company's ability to hit its annual production goal of 500,000 vehicles by 2018. Elsewhere, J C Penney Company Inc (NYSE: JCP ) saw put volume surge ahead of this week's quarterly report after news of "unexpected light sales" for April sent bulls scrambling for the exits. Finally, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ: TEVA ) attracted record short-term volume ahead of this morning's quarterly earnings report.

Tesla Motors Inc (TSLA)

TSLA traders aren't buying Tesla's latest production claims.

The company posted a smaller-than-expected first-quarter loss late Wednesday last week, but Elon Musk's promise of annual production of 500,000 vehicles was the show-stealer.

Traders sided with disbelieve at the lofty goal, however, sending TSLA stock down more than 5% on the day. Shares rebounded more than 1.5% on Friday, but options activity remained largely bearish on the day.

Specifically, puts accounted for 57% of the 272,000 contracts crossing the tape on TSLA on Friday. What's more, the weekly May 13 series is lousy with put open interest, with more than 2,400 puts open at the $200 and $190 strikes.

A closer look reveals that this activity may be of the bull put spread variety. At last check, such a trade would net a credit of 73 cents, or $73 per pair of contracts - which the trader would keep as long as TSLA held north of $200 through expiration this Friday.

J C Penney Company Inc (JCP)

JCPenney is slated to release its first-quarter earnings report ahead of the open this Friday, but JCP traders got an early warning that things may go south late last week. Per the reports, JCPenney saw "unexpected light sales" in April and took took emergency actions to protect its bottom line, including cutting employee hours and banning markdowns.

JCP stock responded by plunging more than 7.5%, with options traders chasing the decline on Friday. Overall volume swelled to a near-term high of more than 422,000 contracts, with puts making up 78% of the day's take.

The heavy attention to JCP puts is quite evident in the weekly May 13 series, where both the $9 and $8 strikes have attracted more than 11,100 contracts each. By comparison, peak call OI for the series totals just 2,740 contracts at the $9 strike. At last check, the May $8 put was asked at 52 cents with JCP perched just overhead at $8.26.

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

With the $40.5 billion acquisition of Allergan PLC's (NYSE: AGN ) generic drug operations still looming, TEVA stock investors were closely watching this morning's quarterly report. In it, Teva saw a smaller-than-expected decline in first-quarter earnings , as sales of generic drugs fell 17%. As a result, TEVA is up more than 2% premarket after plunging nearly 7% on Friday following news that Teva was divesting some $2 billion in assets to avoid antitrust claims with its AGN acquisition.

Options traders were hoping for a TEVA rebound. Calls made up some 58% of Friday's total volume of more than 512,000 contracts. As for weekly May 13 OI, there is heavy put open interest at the $48.50 strike, totaling roughly 41,300 contracts, compared to peak call OI of 10,700 contracts at the $54.50 strike.

Barring any major drivers for the rest of the weekly, TEVA could be left to drift in the $51-$52 region given the light reaction to this morning's report.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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The post Monday's Vital Data: Tesla Motors Inc (TSLA), J C Penney Company Inc (JCP) and Teva Pharmaceutical Industries Ltd (ADR) (TEVA) appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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