Good Earnings, Good Day
Both the Dow and Nasdaq opened strongly but have been trading lower throughout the day.
A strong earnings report from Cisco Systems moved the market higher overnight and in the early morning. Cisco’s sales were up 61%.
In other news, Firestone/Bridgstone is expected to announce a recall of over 20 million tires. Software.com
(
SWCM |
Quote |
Chart |
News |
PowerRating) and Phone.com
(
PHCM |
Quote |
Chart |
News |
PowerRating) are in a $6.8 billion merger deal. Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) is partnering up with AOL Europe and ShopSmart.com to spread the word about its low prices.
Don’t forget that Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) is scheduled to announce earnings after the bell. Expect to see some heavy options activity.
The OEX is at 806.48, up 0.52. The VIX is at 21.66, up 0.83 from the close on Tuesday.
The AMEX Mexico Index is at 116.97, down 1.49.
The NYSE Financial Index is down 8.17 to 519.26.
The top five calls by volume are:
CSCO August 70s
CSCO August 65s
CSCO August 60s
CTXS August 20s
MSFT August 75s
Surprised to see Cisco on there three times? Don’t be. The high volume in the stock is mirrored by the high volume in the options market.
The top five puts by volume are:
AMAT August 85s
SPX September 1350s
ORCL August 75s
CSCO August 70s
QQQ Septembers 91s
Remember that if you’re looking to hedge a position because earnings are due to be released on a stock you own, you can always sell calls against your position. Some traders will also sell far OTM puts, but the risk is, of course, increased.