What are Options? They are a contract that is sold to one trader, the option writer to another trader, the option holder. The contract gives the buyer the right but not the obligation to buy sell the security on the agreed price; the strike price. All contracts (options) will expire on a certain date.
Calls - gives the right to buy.
Puts - gives the right to sell.
This morning Amylin Pharmaceuticals Inc.(NASDAQ:AMLN) is declining lower by 24.0 percent as the companies diabetes drug failed to beat a competitors drug in a head to head test. The stock price is nearing its October 2010 low which was $9.50 a share. This double bottom low price will be some short term support for Amylin stock.
The GBP USD fell sharply on Tuesday, triggered by negative comments from Bank of England’s Adam Posen regarding more quantitative easing. Posen said that more QE is going to be needed in order to lead the UK economy to full recovery. Posen suggested that further fiscal stimulus and corporate debt buying might be needed if this round of QE is not enough.
The U.S. Dollar is trading mixed against the major currencies ahead of the U.S. opening. The Greenback is posting gains versus the British Pound and Japanese Yen while showing a slight loss versus the Euro and an even bigger decline against the risk-related currencies.
U.S. equity markets retreated after Kansas City Fed President Hoenig called for the central bank to begin increasing interest rates before another asset bubble forms. Although a Treasury auction early in the session indicated that the Fed would most likely keep interest rates low for a prolonged period, nervous traders chose to listen to Hoenig and sold equities.
Big Lots (BIG) reports on Monday, March 1, and there is a very good likelihood the stock will rise on the earnings news. This is an options trade recommendation to profit from the expected move in the stock.
