Kinahan: Here's How The Markets Are Betting On Oil, Netflix And Yahoo

After a busy earnings week last week and the Doha meeting on the weekend, JJ Kinahan, chief strategist and managing director at TD Ameritrade Holding Corp. AMTD, spoke with Benzinga and shared some comments and ideas.

A Look Into Earnings

The expert started with last week’s earnings calls (from the financial sector) and the impact they might have on other sectors of the economy. Last week’s earnings calls were very good, “because they showed the health of the consumer,” Kinahan said.

However, he added, Morgan Stanley MS’s report was “a little bit disappointing from the consumer point of view.”

2016 has seen individual retailers do pretty well, he continued. So, maybe the sector is better off than what “we’re seeing out of retail sales, because retail sales can be a little bit tough to measure.”

Consequently, outside financials, a sector that could post strong results this quarter is the retail sector, especially on the higher end -- Tiffany & Co. TIF, Nordstrom, Inc. JWN, etc.

The Options Market

TD Ameritrade’s chief strategist then shared some ideas to play the options market. First off, he took a look at Yahoo! Inc. YHOO, which is reporting its quarterly financial results after the market closes on Tuesday.

As per the firm’s data, the market is expecting a move of just over 4 percent on the earnings call; meanwhile, implied volatility is at the 53^rd percentile, he explained.

However, Yahoo did see a considerable number of buyers of the $37.00 calls and the $35.00 puts.

Netflix, Inc. NFLX investors, on the other hand, are expecting a big move (about 9.5 percent) on its earnings call, which is scheduled for after the bell rings on Monday. The $110.00 calls saw plenty of buyers this week, same as last week; the $100.00 puts in the weeklies also witnessed considerable action.

Having said this, Kinahan noted that implied volatility stands at the 51^st percentile.

One last interesting detail: Netflix is trading at 2.5 times the normal amount of calls and 3 times the normal amount of puts on Monday.

The Doha Oil Freeze

Finally, the expert went into oil. “I know crude’s down on the day, but if you look at it from the overnight lows of both crude and the market, this is a pretty impressive rally,” he said, talking about Monday’s price action following the Doha meeting.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.