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Monday’s Vital Data: Comcast, Amazon and Citigroup

Tyler Craig

U.S. stock futures are trading higher ahead of the final trading day of 2018. Optimism over progress in the ongoing U.S.-China trade war stands as the most logical catalyst. Over the weekend President Trump said he had a “very good call” with Chinese President Xi Jinping.

Monday's Vital Data: Comcast, Amazon and Citigroup

Heading into the open, futures on the Dow Jones Industrial Average are up 0.81% and S&P 500 futures are higher by 0.68%. Nasdaq-100 futures have added 0.92%.

In the options pits, call volume dominated on Friday. Specifically, about 19.8 million calls and 15.1 million puts changed hands on the session.

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The sharp contrast between call and put demand made waves at the CBOE, where the single-session equity put/call volume ratio plummeted to 0.44 — a new 2018 low. The 10-day moving average ticked lower to 0.79

Here are three stocks winning the popularity contest on Friday. Comcast (NASDAQ:CMCSA) saw renewed options interest ahead of its quarterly dividend payout. This morning Amazon (NASDAQ:AMZN) is benefiting from plans to expand Whole Foods stores across America. Finally, Citigroup (NYSE:C) was flooded with activity amid its unit sale

Let’s take a closer look:

Comcast (CMCSA)

An upcoming dividend payout landed Comcast stock atop Friday’s most-active list. The cable giant will trade ex-dividend on Dec. 31. Shareholders who purchased CMCSA before today will have rights to its 19 cents per share payment which translates into an annual yield of 2.2%.

Market moving news was absent for Comcast over the holidays. The technicals of its share price remain murky. Flat moving averages coupled with a share price in the middle of its 52-week high and low make for an uninspiring stock to play directionally.

On the options trading front, calls outpaced puts on the session. Total activity surged to 744% of the average daily volume, with 132,062 total contracts traded. Calls accounted for 58% of the day’s take.

Implied volatility drifted slightly lower on the day to 36%, placing it at the 28th percentile of its one-year range. Premiums are pricing in daily moves of 77 cents or 2.2%


Amazon (AMZN)

Amazon stock inched higher on Friday amid a continued recovery in the technology space. And the gains are continuing premarket this morning. The reason for the $30 bump in early morning trading are plans for adding more Whole Foods stores. According to the Wall Street Journal, “Amazon.com Inc. is planning to build and expand Whole Foods stores across the U.S., people familiar with the plans said, to put more customers within range of the e-commerce giant’s two-hour delivery service.

Positive news aside, AMZN stock remains in a downtrend beneath descending 50-day and 20-day moving averages, so rallies are still suspect.

On the options trading front, calls ruled the day. Activity increased to 155% of the average daily volume, with 343,771 total contracts traded. About 60% of the trading originated from call options.

Implied volatility slid on the day to 49%, placing it at the 76th percentile of its one-year range. Premiums are now pricing in daily moves of $45.20 or 3.1%

Citigroup (C)

News was nonexistent for Citigroup stock on Friday, so the mad dash for calls was a technically driven event. Though, the catalyst for the sudden call surge is anyone’s guess. C stock remains locked in a downtrend with increasing momentum to the downside. The three day rebound it finds itself in the midst of looks like a dead-cat bounce and nothing more at this stage.

On the options trading front, traders came after calls with a vengeance. Total activity ramped to 144% of the average daily volume, with 152,398 total contracts traded. 81% of the trading came from call options alone.

The price rise took implied volatility down a few notches to 49%, placing it at the 80th percentile of its one-year range. Premiums are pricing in daily moves of $1.60 or 3.1%.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

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