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PBR

WEEK OF 11/20: HIGH IV IN PETRO UNDERLYINGS; NOT MUCH ELSEWHEREAfter having gone through my usual routine of screening for high implied volatility rank/high implied volatility underlyings for plays this coming week, one thing stands out: the implied volatility is in petro, with stocks like CHK, SDRL, WFT, PBR and the like rounding out my top 10 IV list.* With OPEC talks approaching here, and "friskiness" in petro-based underlyings likely to ensue, I'm loathe to pile into more petro, particularly if it involves a bullish assumption. The "more likely than not" outcome is no meaningful OPEC agreement as to cuts, which means oil down, which means further long opportunities below somewhere. If the contrarian outcome comes to pass (i.e., "meaningful cuts"), well, then I've just plain ass missed an opportunity to add long positions here and will have to make do with the bullish assumption positions I've got on here. That being said, the "Top 10" list isn't entirely bereft of possibilities, depending on your risk tolerance and aversion to roller coasters. For example, GPRO may be worth a bullish assumption play here on the notion that Christmas sales of its drones will be "brisk," something we probably won't know unless GPRO discloses its unit sales before its Q4 earnings announcement next year. The nearest to the 20-delta strike short put, 45 DTE, however, is the Dec 30th 8.5, which would bring in .36 ($36)/contract at the mid -- not exactly something that gets me excited. Even assuming I wanted to go nondirectional (short strangle/straddle, iron condor/fly), I can't squeeze enough out of those setups premium wise to make it worthwhile. VRX is, well, VRX. The Dec 30th 14.5 short put (currently the 19 delta) goes for .66 ($66) at the mid price. That isn't bad, but I have to put up with sitting on pins and needles for 5 weeks or more with that setup. The alternative would be to go with a defined risk setup (not keen on being caught undefined in a potential whipsaw). Even there, however, an iron condor won't pay out at least 1.00 in credit without forcing the wings in beyond the 1 SD (I prefer more room with volatile biotech), and I'm not sure that I would want to go with the narrower breakevens of a fly, in spite of the fact that the credit I'd receive at the door would be more than sufficient. (A Dec 30th 13/18/18/23 iron fly would bring in 2.78, for example). Well, what about AMD? That's in the list ... . Like its semicon counterpart, NVDA, AMD's been on a rip and the place to have gotten in was lower for a bullish assumption play (scratches "short put" off his list). And nondirectional doesn't pay enough: the Dec 30th 8.5 short straddle would bring in a 1.44 credit at the mid (I like to get at least 2.00 out of those); the 7/10.5 short strangle, .40 at the mid. Defined risk (flies, condors) will bring in even less. CLF? Same deal (can't get much out of the 45 DTE 20 delta short put; short straddle/strangle, iron condor/fly bring in too little premium). Ugh. Sometimes, these holiday weeks are best for hand sitting ... . Looks like this is going to be "par for the course." * -- The top 10 implied volatility stocks (in descending order): CHK, WFT, VRX, CLF, AMD, GPRO, PBR, RIG, VALE, CX, UNG.
AMEX:XOP
by NaughtyPines
PBR is in an ascending wedge while USOIL prices are falling.PBR is in an ascending wedge while USOIL prices are falling. PBR is testing resistance at $7.50 for the third time. USOIL tested support at $46 for the third time and broke down through that support. It now appears to be in a downward channel. Being new to this, I opened a short position on PBR two days ago and added to it yesterday. Ideally, I should have waited until PBR breaks downward . I will short PBR hard if it breaks down while USOIL is also falling. I am new to this with no track record of success. Don't make any trades based solely on my posts.
NYSE:PBRShort
by haug01
1
PBR is correlated to oil prices, but that's not all...PBR is correlated to oil prices, but that's not all. Out of a selection of other oil majors, PBR underperforms significantly when the starting month of August 2011 is chosen, a date I arbitrarily chose due to launch of a new industrial policy in Brasil (a proxy of changing economic policy). Note, however, work done by my friend, Raphael Geraldelli (related ideas), showing a much closer correlation of PBR to oil prices in a more recent period (). The takeaway here is that although PBR is correlated to oil prices, internal company issues and Brazilian political economy played an important historical role in the stock's price and I believe it will continue to do so moving foreword.
NYSE:PBR
by BrunoBoni
Petrobras Brasileiro: Corruption undermines Fitch RatingI've flagged Brazil's state-owned mega-energy firm Petrobras Brasileiro ADR (NYSE: PBR) because the SEC is investigating the energy firm for money-laundering and corruption, thus skewing Fitch Ratings of PBR. Since PBR owns a Texan refinery, PBR it is accountable under US jurisdiction. PBR has been found in violation of the Foreign Corrupt Practices Act and "other laws". I highly suspect "other laws" may very well be The Racketeer Influenced and Corruption Organizations Act (RICO), taking into account PBR's "cartel" influence in the global energy sector. $PBR closed at $10.50 at the closing bell; -$.34 or -3.14%. Its price range was $11.51 at pre-market, opening around $11.15 then plummeting down to $10.41 during Wall Street's Witching Hour. What is more shocking is to learn that the Fitch Ratings just released at the same time; gave an upgrade on the series of notes to "BBB"; the "issuance of which are backed by the royalty flows owed by oil concessionaires, predominately, PBR, and Rio De Janeiro (RJS), of which 100% flows to RioPrevidencia (RP), the states pension fund." In part, the USD 1.1 billion series 2014-3 notes 'BBB', Outlook Stable and BRl 2.4 billion series 2014-2 special indebtedness interests notes affirmed at 'AAAsf(bra)', Outlook Stable. PBR's cartel is backing a capital investment program at USD 220 billion between 2014 and 2018. PBR is an asset to be used when the market performance is shaky. Its personality Currently the downside calculation of price per share: $.54.
NYSE:PBRShort
by Zentoro
1