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Options

RUT Report


CBOETV - The RUT sets new all-time high of 1424.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies are available from your broker, or at www.theocc.com. The information in this program is provided solely for general education and information purposes. No statement within the program should be construed as a recommendation to buy or sell a security or to provide investment advice. The opinions expressed in this program are solely the opinions of the participants, and do not necessarily reflect the opinions of CBOE or any of its subsidiaries or affiliates. You agree that under no circumstances will CBOE or its affiliates, or their respective directors, officers, trading permit holders, employees, and agents, be liable for any loss or damage caused by your reliance on information obtained from the program.

Copyright © 2016 Chicago Board Options Exchange, Incorporated.   All rights reserved.

This video is from CBOE and is being posted with CBOE’s permission. The views expressed in this article are solely those of the author and/or CBOE and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Options

Volatility 411


CBOETV - Dan Deming, KKM Financial, discusses activity in Aug calls.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies are available from your broker, or at www.theocc.com. The information in this program is provided solely for general education and information purposes. No statement within the program should be construed as a recommendation to buy or sell a security or to provide investment advice. The opinions expressed in this program are solely the opinions of the participants, and do not necessarily reflect the opinions of CBOE or any of its subsidiaries or affiliates. You agree that under no circumstances will CBOE or its affiliates, or their respective directors, officers, trading permit holders, employees, and agents, be liable for any loss or damage caused by your reliance on information obtained from the program.

Copyright © 2016 Chicago Board Options Exchange, Incorporated.   All rights reserved.

This video is from CBOE and is being posted with CBOE’s permission. The views expressed in this article are solely those of the author and/or CBOE and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Securities Lending

Pizza with a Rate Topping


Papa Murphy's Holdings Inc (NASDAQ: FRSH) owns and franchises stores, selling uncooked pizzas which customers can bake in the oven for “freshness.”  The Washington state-based company’s market capitalization is $83M.  Papa Murphy’s has been getting more popular with shorts since Q4 2016, with lenders doubling the borrow fee from 1.7% to around 3% today.  Both revenue and Net Income have fluctuated during the past 3 years.  Short Interest is 25% of the float with Utilization in the low 90s.  While shares are available around the street -- meaning demand is under supply -- that condition may change quickly with a small cap name.  Large banks showing today, medium-sized prime brokers borrowing.

 

 

The analysis in this article is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Macro

Reflation moderation


The “reflation trade" that began in late 2016 has lost steam. Russ discusses what comes next.

 

Back in late 2016 it seemed terribly simple. Growth and inflation would rise on the back of U.S. fiscal stimulus. Investors would buy cyclical companies, particularly U.S. small caps, and sell bonds. Four months later, the reflation trade, while not quite dead, seems less a sure thing.

Cyclical commodities that soared in late 2016 have struggled this year. Commodities, the U.S. dollar and Japanese stocks are some of the worst performers year-to-date (see the chart below). At the same time those assets that faded as investors embraced reflation have rallied, including gold, emerging markets and the Japanese yen. Even low yielding European bonds have found a bid. What happened?

 

 

Markets got ahead of themselves

Many asset classes rallied as if a fundamental shift in the growth/inflation paradigm was a foregone conclusion. Investors assumed Washington would effortlessly churn out an assortment of pro-growth measures: tax reform, fiscal spending and deregulation. When the reality proved much harder, disappointment set in. Trades that were predicated on faster U.S. growth, such as a stronger U.S. dollar, have fallen the most. After surging more than 10% to a multiyear high, the dollar has retraced nearly half of the move and is back to mid-November levels.

Real economic data have not kept up with “soft data”

By now most have noticed the divergence between the “hard” data, which measures actual economic activity, and the “soft data,” which mostly tracks surveys. While measures of positive economic surprises have risen sharply, most of the improvement is from soft data. Job creation, wage growth, hours worked, retail sales and core inflation have all decelerated. Although the economy appears solid, evidence of a pickup remains elusive.

Many asset classes were stretched even before the rally

The rally in risky assets was only the latest in a bull market now comfortably into its ninth year. Many asset classes, notably U.S. equities, have benefited from years of rising valuations. Large cap U.S. stocks were already trading at 20x trailing earnings in July of 2016. The subsequent rally pushed the multiple up towards nearly 22x, a seven-year high.   With the air coming out of the reflation trade, what should investors expect next? The good news is there is little evidence of a pending recession. The economy, both domestically and globally, is solid with less deflation risk than a year ago. That said, investors will want to consider a more balanced portfolio, one that includes assets that offer income, from both equity and credit, equities tied to secular growth themes and even a bit of U.S. duration and gold. Markets are a bit less frothy than they were in January, but valuations are still elevated and volatility unusually low. And as we’ve seen, it is not as if the risks in the world have gone away.

Russ Koesterich, CFA, is Portfolio Manager for BlackRock’s Global Allocation team and is a regular contributor to The Blog.

Investing involves risks, including possible loss of principal.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of April 2017 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. Past performance is no guarantee of future results.

©2017 BlackRock, Inc. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.

RO-149098

This article is from BlackRock and is being posted with BlackRock’s permission. The views expressed in this article are solely those of the author and/or BlackRock and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Macro

Foresight from present insight


Welcome to this Real Vision TV taster. Daniel Want, CIO of Prerequisite Capital Management, is a master of interpreting liquidity trends and his last presentation on the shortage of global collateral in the economy blew Real Vision viewers away. Daniel contends that the popular reflationary narrative is transitory and the falling trends in productivity, liquidity and velocity provide greater insights into the contracting global system, incapable of creating net high quality assets. Watch the full interview on Real Vision TV now.

 

Real Vision TV is the world's first video on demand platform for finance and investing. It features in-depth, short-form and long-form interviews, presentations and documentaries with the world’s best investors, independent analysts, economists, geo-political strategists and policy makers. It now has paying subscribers in over 100 countries around the world. Our customers include some of the world’s most famous money managers along with students, RIA's, investment professionals, financial service professionals and home investors.

This video is from Real Vision TV and is being posted with Real Vision TV’s permission. The views expressed in this video are solely those of the author and/or Real Vision TV  and IB is not endorsing or recommending any investment or trading discussed in the video. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Disclosures

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The material (including articles and commentary) provided on IB Traders' Insight is offered for informational purposes only. The posted material is NOT a recommendation by Interactive Brokers (IB) that you or your clients should contract for the services of or invest with any of the independent advisors or hedge funds or others who may post on IB Traders' Insight or invest with any advisors or hedge funds. The advisors, hedge funds and other analysts who may post on IB Traders' Insight are independent of IB and IB does not make any representations or warranties concerning the past or future performance of these advisors, hedge funds and others or the accuracy of the information they provide. Interactive Brokers does not conduct a "suitability review" to make sure the trading of any advisor or hedge fund or other party is suitable for you.

Securities or other financial instruments mentioned in the material posted are not suitable for all investors. The material posted does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before making any investment or trade, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. Past performance is no guarantee of future results.

Any information provided by third parties has been obtained from sources believed to be reliable and accurate; however, IB does not warrant its accuracy and assumes no responsibility for any errors or omissions.

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