Category Archives: etf

Taking Profits On Our SPY Call Spread

You have just made a respectable 10.40% profit in only two trading days. What’s more, you have captured 90.32% of the maximum potential profit in this position. So it’s time to take a welcome profit. The risk/reward of running this position into the May 20 expiration is no longer favorable. As I argued vociferously at the February 11 bottom, yield support is underpinning stocks in a huge way, frustrating the hell out of short sellers, market timers, and hedge funds everywhere. With the volatility Index (VIX) plunging to the $13 handle today we have a nice opportunity to sell the S&P 500 SPDR’s (NYSEARCA: SPY ) May , 2016 $195-$198 in-the-money vertical bull call spread for a few extra pennies than we could yesterday. This all lends further credibility to my “Dreaded Flat Line of Death Scenario” whereby markets move sideways in a narrow range and nobody makes any money, except us. To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse . The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous. Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out. Here are the specific trades you need to execute this position: Sell 37 May, 2016 $195 calls at………….….……$12.40 Buy to cover short 37 May, 2016 $198 calls at…..$9.43 Net Cost:…………………………………………………..$2.97 Profit: $2.97 – $2.69 = $0.28 (37 X 100 X $0.28) = $1,036 or 10.40% profit in 2 trading days. Is That a Profit I See? Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disney’s Exit From Toys-To-Life Video Games Could Boost Activision

Walt Disney ‘s ( DIS ) decision to end its Infinity interactive toy and video game product line could provide a lift to rivals in the toys-to-life business, namely Activision Blizzard ( ATVI ) and Warner Bros. Interactive Entertainment, a unit of Time Warner ( TWX ). Disney announced Tuesday that it is getting out of the self-published video game business and canceling its Infinity game series. Disney took a $147 million charge to its fiscal-second-quarter results to close the division. Disney’s Infinity exit leaves Activision’s Skylanders, Warner’s Lego Dimensions and Nintendo ‘s ( NTDOY ) Amiibo in the toys-to-life games segment. The toys-to-life genre involves the use of figurines or action figures that are placed on a small platform to interact with on-screen play for game consoles. “Disney’s announcement that they are exiting the toys-to-life category in a production capacity creates some interesting opportunities,” Cowen analyst Doug Creutz said in a report Thursday. “First, we think it paves the way for a significant bounce back in Skylanders sales this year; second, we suspect the Disney IP (intellectual property) will eventually wind up as part of WB’s Lego Dimensions franchise.” Toys-to-life video game sales, excluding sales of stand-alone toys, peaked in 2013 with the launch of Infinity, Creutz said. The category declined 20% in 2014 and was flat in 2015, he said. Nintendo launched Amiibo toys in 2014, but it doesn’t have a stand-alone game like Infinity, Skylanders and Lego Dimensions. Amiibo toys are integrated into existing Nintendo games. “With Activision now the only player planning to launch a toys-to-life game in 2016 (there will be some Dimensions playsets but no new game), if the category remains flat, Skylanders could grow by as much as 300%,” Creutz said. “This would be a source of surprise upside to Activision’s guidance. “In any case, the elimination of a competitor can only be a positive for both Activision and WB’s profitability from the category.” Cowen rates Activision stock outperform, with a price target of 44. Activision stock was up a fraction, above 37, in afternoon trading on the stock market today . The shares broke out of a cup-with-handle base at a 34.76 buy point on April 13. Cowen rates Disney and Time Warner stocks as market perform. Disney stock was down a fraction Thursday afternoon, while Time Warner was down more than 1%. RELATED: EA Stock Soars Like ‘Star Wars’ Millennium Falcon After Q4 Beat .

Court Ruling On Open Internet Imminent For Comcast, Verizon, AT&T

A federal appeals court could hand down a decision any day on the Open Internet Order — also called “net neutrality” — rules opposed by Internet service providers such as AT&T ( T ), Comcast ( CMCSA ) and Verizon Communications ( VZ ). The U.S. Court of Appeals for the District of Columbia Circuit typically releases decisions on Tuesdays and Fridays. Telecommunications, cable and wireless industry trade groups have challenged the Federal Communications Commission’s authority to enforce rules for an open Internet . In separate cases, Verizon and Comcast have successfully challenged earlier FCC net neutrality rules. A ruling from “D.C. Circuit 3” appeals court had been expected as early as April. The three-judge panel heard oral arguments in December. Judge David Tatel, who ruled against the FCC in an earlier case, in December appeared more favorable to the FCC’s position, some analysts say. Phone and cable TV stock will likely trade up or down depending on the ruling from the appeals court’s three judge panel. The case, however, could reach the U.S. Supreme Court. “Most agree this is an issue that will likely end up before the Supreme Court, especially if the FCC wins,” said Jennifer Fritzsche, a Wells Fargo analyst, in a research report published Thursday. Jonathan Atkin, an analyst at RBC Capital, said in a recent report that the appeals court may overturn rules on net neutrality that apply to wireless networks but uphold those for wireline broadband. Another court option is to “remand” the FCC’s rule-making back to the agency for additional work The FCC in February 2015 reclassified broadband services as a public utility, in order to enforce net neutrality rules under Title II of the 1934 Communications Act . The agency also expanded net neutrality rules to wireless networks for the first time. The rules bar ISPs from throttling, blocking or prioritizing Web traffic. The FCC also created a general conduct standard that ISPs cannot harm consumers or service edge providers, such as Alphabet ‘s ( GOOGL ) Google or Netflix ( NFLX ). Some consumer groups over the past six months have objected to new, so-called “zero-rated,” services offered by Verizon, Comcast and T-Mobile US ( TMUS ) that do not count video or data usage toward monthly caps.