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  • How Large Boeing, Delta Options Traders Are Positioning As Economy Reopens

    How Large Boeing, Delta Options Traders Are Positioning As Economy ReopensBoeing Co (NYSE: BA) shares traded higher by 4.26% on Thursday and Delta Air Lines, Inc. (NYSE: DAL) shares gained 1.94% as the stock market experienced yet another volatile trading session.A flurry of large Boeing and Delta option trades on Thursday morning were mixed in nature, with one deep-pocketed Boeing bull making a massive bet on a sharp recovery for the stock.The Boeing, Delta Trades Benzinga Pro subscribers received 35 option alerts related to unusually large trades of Boeing and Delta options. Here are a handful of the largest: * At 9:30 a.m., a trader bought 1,000 Boeing call options with a $130 strike price expiring on May 29 at the ask price of $9.60. The trade represented a $960,000 bullish bet. * At 9:50 a.m., a trader bought 1,370 Delta put options with a $45 strike price expiring on Jan. 15, 2021 at the ask price of $23. The trade represented a bearish bet worth $3.15 million. * At 10:10 a.m., a trader bought 542 Boeing call options with a $145 strike price expiring on May 29 near the ask price at $4.558. The trade represented a $247,043 bullish bet. * At 10:48 a.m., a trader bought 462 Boeing call options with a $150 strike price expiring on Jan. 15, 2021 near the ask price at $27. The trade represented a bullish bet worth $1.24 million.Of the 35 total large Boeing and Delta option trades on Tuesday morning, 20 were calls that were purchased at or near the ask or puts sold at or near the bid, trades typically seen as bullish. The remaining 13 trades were calls sold at or the near the bid or puts purchases at or near the ask, trades typically seen as bearish.Why It's Important Even traders who stick exclusively to stocks often monitor option market activity closely for unusually large trades. Given the relative complexity of the options market, large options traders are typically considered to be more sophisticated than the average stock trader.Many of these large options traders are wealthy individuals or institutions who may have unique information or theses related to the underlying stock.Unfortunately, stock traders often use the options market to hedge against their larger stock positions, and there's no surefire way to determine if an options trade is a standalone position or a hedge. In this case, given the relatively large sizes of the largest Boeing and Delta trades, they could potentially represent institutional hedges.Travel Stocks In Limbo Boeing and Delta shares are each down more than 55% year-to-date, as the COVID-19 outbreak has decimated the travel industry. Back in March, both companies announced they were suspending their buybacks and dividends.But while the outbreak rages on, travel stocks have gotten a boost in recent days thanks to cautiously optimistic signs the economy is opening back up and potential progress on developing a COVID-19 vaccine.On Thursday, Credit Suisse initiated coverage of battered travel stocks Royal Caribbean Cruises Ltd (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd (NYSE: NCLH). In addition, RBC initiated coverage of Boeing with an Outperform rating.Although the near-term outlook for travel stocks will continue to be difficult, analysts seem to see the downturn as fully priced into the stocks. Instead, they are focusing more on a potential bullish long-term risk-reward skew.Bullish sentiment among StockTwits messages mentioning Boeing was at 80.9% on Thursday, its highest level of 2020. BA Chart by TradingView new TradingView.widget( { "width": 680, "height": 423, "symbol": "NYSE:BA", "interval": "D", "timezone": "Etc/UTC", "theme": "light", "style": "1", "locale": "en", "toolbar_bg": "f1f3f6", "enable_publishing": false, "allow_symbol_change": true, "container_id": "tradingview_a50c0" } ); Benzinga's Take While the majority of the large option trades in Boeing and Delta on Thursday morning were bullish, the largest trade was the $3.1 million bearish Delta put purchase. The break-even price for those puts is $22, suggesting at least 5.1% downside for Delta shares over the next eight months.Do you agree with this take? Email feedback@benzinga.com with your thoughts.Related Links:JPMorgan Option Trader Bets M On Downside Ahead How To Read And Trade An Option AlertSee more from Benzinga * Q1 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios * Bartstool's Dave Portnoy Breaks Down About The Importance Of Diversification * Here's How Large Boeing Option Traders Are Reacting To Abysmal Monthly Orders(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Watch Out Amazon, Facebook is Coming for You

    Watch Out Amazon, Facebook is Coming for YouFacebook’s (FB) universe is getting even bigger. On Tuesday, the social media colossus unveiled Facebook Shops, elbowing its way to the front of the e-commerce queue. The platform will act as a digital shopfront where businesses of all sizes will be able to sell their products. Customers will be able to make purchases directly through either Facebook or Instagram. “We think Facebook Shop in a simplistic bull case could drive up to as much as a $30 billion revenue opportunity, across a combination of take-rate driven transactional and advertising revenue,” said Deutsche Bank analyst Lloyd Walmsley. Facebook hopes the move will help alleviate some of the pressure on small businesses as a result of COVID-19. The new platform significantly expands on last year’s rollout of Instagram Checkout. Looking specifically at Checkout, Walmsley originally estimated the 130 million users of Instagram shopping tags would increase to just under 400 million by 2021. The analyst believes the new endeavor will “drive this activity across 2.6 billion core Facebook MAUs and 3.0 billion MAU across the Family of apps,” translating to roughly three times the addressable audience initially estimated. Adding to the good news, the new service will include numerous features like Instagram Shop, where users will be able to find and purchase products in Instagram Explore, as well as live shopping features (taking a page out of Alibaba’s playbook) and the ability to connect loyalty programs (currently in test mode). Facebook will also work with other brands such as Shopify, BigCommerce and WooCommerce to help businesses operate online. Walmsley expects Facebook shares to pop over the coming weeks, reminding investors that following the launch of Instagram Checkout, the stock surged by 17% over a one-month period. “FB shares could similarly outperform over the next month as investors anticipate a nice contribution from eCommerce more broadly across the platform,” he concluded. Unsurprisingly, Facebook has widespread Street support. 3 Hold ratings are crushed by 33 Buys, presenting the social media king with a Strong Buy consensus rating. (See Facebook stock analysis on TipRanks) Read more: * Top Analyst Sees Over 35% Upside in These 3 Tech Stocks * 3 Big Dividend Stocks Yielding Over 7%; BMO Says ‘Buy’

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  • Has China banned Australian coal?

    Two red shipping containers with the word 'Tariff' and Chinese flag

    Has China banned Australian coal? There may be another step in the pressure that China is exerting onto Australia.

    According to the Australian Financial Review, some power plants in China have been told to stop importing Australian coal. If that’s the case then perhaps China has indeed banned Australian coal. 

    It may be as simple as China wanting to support its own coal industry. But it comes at a time when China has already hit Australian barley. Australian beef and perhaps even Australian iron ore could be in the firing line. Basically, most of Australia’s main commodity exports to China is looking like it’s under pressure from the Asian superpower.

    What will the share prices of Australian coal miners drop?

    We’ll see this morning. There are several large coal miners on the ASX including BHP Group Ltd (ASX: BHP), Whitehaven Coal Ltd (ASX: WHC), Yancoal Australia Ltd (ASX: YAL) and New Hope Corporation Limited (ASX: NHC).

    Some coal miners sell more coal to China than others, so it doesn’t affect them all the same. For example, a lot of Whitehaven’s customers are based in Japan. Places like Taiwan and India are also customers of Australian coal. Indeed many Asian countries buy Australian coal. 

    It’s concerning to see that China is pressuring Australia over the coronavirus inquiry, particularly if China has entirely banned Australian coal. But in terms of what effect this might have on ASX coal miners, it’s not as much as what a ban on iron ore would do.

    Coal miners are certainly priced cheaply at the moment. The coal price isn’t as high as it once was and coal usage in most countries is expected to fall over the next couple of decades.

    I’m not looking to buy shares of coal miners, but brave investors who don’t mind owning coal shares may be able to make a decent return if coal prices rise.

    But I’d rather invest in quality shares that don’t largely rely on a commodity price to do well.

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Has China banned Australian coal? appeared first on Motley Fool Australia.

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