Thursday, September 11, 2014

Thursday Sep 11 outlook

The /ES looks to open around 1986 after finishing yesterday at 1994.75. The 10yr looks to open around 2.51 after it finished yesterday at 2.53. The /VX finished yesterday at 13.7 and is currently trading around 14.02.

LULU is out with earnings which the street apparently likes. However, this is on greatly reduced expectations. Though apparently there is some concern about its comps being down and decreasing margins. The stock closed yesterday at 38.40 and is currently trading at 44.20. It's pre-mkt range is from 43 to 44.80 on 235k shares traded, 7% of it's average daily volume. 24m shares are short, which is about 28% of the float. The conference call also just started at 9am. Weekly IV was at 132.5% into the report. I may look to get long vol if I can buy it at 50 or 60%

JDSU is trading higher at 13.72 after closing at 12.10. It's currently trading 743k shares vs. average daily volume of 4.25m, which would be 17% of its ADV. Only 3% of the float is short in the name. This pop is off news that the company plans on splitting itself in two.

Recap from yesterday:
An EBAY straddle off the open would have worked as the stock opened around 51.50 and dropped to 50.54 by 10am. It rebounded to close at 51


A GTAT non directional would have worked as well, though it would have taken until EOD to pay off. It opened at 13.70 and closed at 12.77 after hitting a low of 12.65

DDD had a rumor that SAP would buy it for 80/share. Shares initially popped to 52.80 from 52.20, dropped to 52.60 then ripped to 53.70 before falling back down to 52.40 by 11am. It closed at 52.85. Notably, the IV in the calls wasn't nearly as jacked as the IV in the weekly puts when the stock was at 53.50, not lending much credence to the validity of the rumor.

VNET grenaded yesterday. There was a short report released, though not from Muddy Waters. Stuck plummeted as low 14.23 before closing at 20.

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