TradeKing Midday Market Call Recap - $SPX, $HES

TK All-Star posted on 07/14/16 at 05:37 PM

Featuring @BrianOverby  &  @MNKahn




Quick Takes Pro Market Technician Michael Kahn Analyzes the S&P 500:


SPX was trading at 2,022.52 at the time of analysis, up 21.98 on the day. Obviously a few things happened last week. Britain voted to leave the European Union. Prior to the news, the upside resistance line held. After the news, we had a confirmed break down of the current trend. Michael thinks in the short term a bounce-back to the 2040 range could be possible, but there is too much happening too quickly to have a solid forecast at the moment. He does think the “panic” created by Brexit was a little overdone, but his path of least resistance over the summer months is to the downside.


Michael Kahn’s Chart of the Day: HESS CORP (HES):


Hess Corp. was trading around the 54.50 level during the time of analysis, below its 50-day moving average of 58.58 and above the 200-day moving average of 52.92.


HES is in the energy sector, which had a long declining trend and then a little bounce back with the upturn in oil. In recent months, it just stalled out. In the past couple of days, we have a confirmed breakthrough of a support at the 55 level. What Michael interprets from the chart is a stock that has broken down through support, but has recently rebounded a bit. The stock price is currently testing the old support level, which now acts as a resistance level. If the stock cannot break through resistance to the upside, it may be a strong bearish sign.



TradeKing “Options Guy” Brian Overby Analyzes HESS CORP - Volatility & Dividends:


HES’s 30-day Implied Volatility (IV) has recently spiked; it’s now at the upper half of the yearly range at about 50%.


HES pays quarterly dividends yielding about 1.82% annually, and went ex-dividend on 06/14/2016. The next earnings announcement is anticipated for 08/03/2016.


Brian Overby Shares HES Paper-Trading Strategies:

Brian’s first paper trade was a Long Put Spread, a bearish trade that is lower in cost than buying a put outright. The second paper trade is a neutral-to-bearish Short Call Spread.


Brian’s First Paper Trade - Long Put Spread


- Buy 1 Jul 15th 2016 HES 55 Put

- Sell 1 Jul 15th 2016 HES 50 Put


- 17 days to expiration


- Net Bid 1.52, Mid 1.61, Ask 1.69 for the strategy

- Net Debit is 1.61 if we get it at the mid-price; note that this is not always possible


- Maximum potential loss: 1.61

- Maximum potential gain: 3.39

- Total commission to enter this trade at TradeKing is $6.25


Brian’s Second Paper Trade - Short Call Spread  


- Buy 1 Aug 19th 2016 HES 65.00 Calls
- Sell 1 Aug 19th 2016 HES 62.50 Calls


-  52 days to expiration


- Net Bid .34, Mid 0.41, Ask 0.48 for the strategy

- Net Credit is 0.41 if we get it at the mid-price; note that this is not always possible


- Maximum potential loss: 2.09

- Maximum potential gain: 0.41


- Total commission to enter this trade at TradeKing is $6.25


Important notes: Option prices are given as a per-contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs.


TradeKing Options Tools used:

- Detailed HES Quote

- TradeKing Volatility Charts

- TradeKing Options Pricing Calculator

- TradeKing Probability Calculator

- TradeKing P&L Calculator


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Posted by TK All-Star on 07/14/16 at 05:37 PM

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