Raphael Stevens

A vehicle charges a Tesla Supercharging station in Corte Madera, California, US, on Thursday, March 2, 2023.
David Paul Morris | Bloomberg | Getty Images

Check out the companies making the biggest moves midday:
Tesla — Shares dropped 6% after the electric-vehicle maker reported total deliveries of 422,875 and total production of 440,808 for the first quarter of 2023. A mean of estimates showed that Wall Street expected deliveries of about 432,000 vehicles for the quarter, according to FactSet.

Energy stocks — OPEC’s surprise production cuts sent energy stocks higher across the board. Marathon Oil rallied more than 9%, and Halliburton gained over 7%. APA, ConocoPhillips and Hess all climbed roughly 8%.
UnitedHealth — Shares of the health insurance giant gained about 4% after the Center for Medicare & Medicaid Services on Friday announced updated payment rates. The agency said that Medicare Advantage plans would see an increase in revenue of more than 3% from 2023 to 2024. The advance notice of the payment scale had pegged the increase at just over 1%.
World Wrestling Entertainment — Shares of the professional wrestling entertainment company fell about 4.5% after news that it has agreed to merge with UFC to form a new publicly traded company controlled by Endeavor Group. The deal values WWE at $9.3 billion and UFC at $12.1 billion. Endeavor will own a 51% stake in the new combat sports and entertainment company, while WWE shareholders will have the remaining 49%. Shares of Endeavor dropped 7%.
Marqeta — The stock shed 3.06% after being downgraded by Morgan Stanley to equal weight from overweight. The Wall Street firm said Marqueta is facing a “multitude of headwinds” without an ironed-out renewal deal with Block.
Extra Space Storage, Life Storage — Shares of Extra Space Storage fell 5.17% after the company said it would acquire Life Storage in an all-stock transaction for $145.82 per share, an 11.2% premium to where Life Storage closed Friday. Shares of Life Storage shares rose 3.54%.

UBS — U.S.-listed shares of the Swiss bank dipped 3% after Switzerland’s federal prosecutor opened an investigation into UBS’s takeover of Credit Suisse. There are also reports in Swiss media that up to 30% of UBS staff could lose their jobs due to the takeover.
First Solar — Shares shed 4.14% following a downgrade by Morgan Stanley to underweight from equal weight. The Wall Street firm said First Solar is one of the biggest direct beneficiaries of the Inflation Reduction Act, but said the stock has appreciated 196% since the legislation was announced.
Macy’s — The retailer popped 7.49% on the back of an upgrade to overweight from neutral by JPMorgan. The firm said the company is nearing a financial “inflection point.”
SL Green Realty — Shares of the real estate investment trust (REIT) rose 1.15% after BMO upgraded the name to outperform. The firm said it believes the third-most heavily shorted U.S. REIT is oversold given its historically low valuation and several catalysts are “on the horizon.”
Teck Resources — U.S.-listed shares of the Canada-based mining company surged 19.59% after Teck Resources rejected an unsolicited $22.5 billion bid from Glencore, a Swiss mining and trading company.
Apellis Pharmaceuticals — The stock climbed 16.25% and hit a new 52-week high following a Bloomberg report that Apellis Pharmaceuticals is attracting takeover interest.
Ovintiv – The oil and natural gas exploration and production company saw shares jump 11.92% after announcing it will acquire certain Midland Basin assets from EnCap Investments for about $4.3 billion. Ovintiv also raised its first-quarter production guidance and boosted its full-year output forecast.
ADP, Paychex — Shares of the payroll companies dropped after Bank of America downgraded both firms to underperform from neutral, saying the two stocks tend to lag as unemployment starts to rise. ADP shares fell 2.61%, while Paychex shares declined 2.84%.
Atlas Energy Solutions — The stock, which began trading publicly last month, gained 4.76% after Barclays initiated coverage with an overweight rating. Its price target of $25 implies Atlas Energy Solutions could rally 46.8% over the next 12 months from where it closed Friday.
— CNBC’s Alex Harring, Yun Li, Jesse Pound, Tanaya Macheel, Sarah Min and Michael Bloom contributed reporting. More

The closures of Silicon Valley Bank on March 10 and Signature on March 12 led to halts for the stocks — at $106 per share for SVB and $70 per share for Signature. 
That caused problems for traders who had bet the stocks would decline.
The Options Clearing Corporation declared that the options should be determined on a broker-to-broker basis, sending investors digging through their options agreements to figure out next steps. 

A woman leaves a Signature Bank branch on March 13, 2023 in New York City. The bank was closed by regulators Sunday.
Leonardo Munoz | View Press | Corbis News | Getty Images

The sudden failures of Silicon Valley Bank and Signature Bank last month created a nervous waiting game for options investors, showing that even winning trades can be risky in the derivatives market. 
The closures of SVB on March 10 and Signature on March 12 led to halts for the stocks — at $106 per share for SVB and $70 per share for Signature. 

This halt, and how regulators and brokerage firms handled the outstanding options contracts, turned simple trades into a big headache for retail investors. In some cases, traders had to put up additional cash and take on potential risk or see their timely bets expire worthless.
This was a problem for even more sophisticated retail traders such as Shaun William Davies, an associate professor of finance at the University of Colorado-Boulder, who had purchased Signature put options on brokerage platform Robinhood with a $50 strike price as a hedge against market volatility.
A put option gives the holder the right to sell the stock at the strike price and serves as a bet that the stock will go down. A put contract is also attractive because it has limited downside for the holder.
Logically, that trade should have been a big winner, but Davies’ options were technically out of the money, based on the last traded price — that is, the share price at the time was above his $50 strike price — and the stocks were now illiquid. The put options were set to expire March 17.

Stock chart icon

Shares of Signature Bank were halted for about two weeks in March.

Davies said that usually he would sell his winning options trades before expiration, so he does not have to deal with the settlement process. But the halt meant that he had to convince Robinhood to open a short position to exercise his options and then allow him to close out the short position whenever the stock began to trade again. 

The brokerage firm originally told Davies that it would not allow him to open a short position, according to messages with customer support viewed by CNBC. He said there was no mention in the options agreement with Robinhood that highlighted this risk if stocks were halted.
“In hindsight, I should have bought puts on First Republic or something … First Republic traded all day on Monday [March 13]. I just happened to trade the one that was shut down — which should have been the best hedge, but it turned out to be the worst hedge,” Davies said March 15, when he thought his options would expire before he could exercise them. 
Robinhood later allowed Davies to create the naked short position and therefore to exercise his option. A Robinhood spokesperson told CNBC that the firm was reaching out to customers individually to help work through the issues. 
However, there was still a uneasy waiting period for Davies and other traders in his position. The naked short positions showed an on-paper loss in his account until the stock began trading over the counter on March 28. While he had enough cash in his account to cover margin requirements, Davies said he was restricted from doing further trades until the short position was covered.

Other brokerages

While some of Davies’ confusion may have been related to Robinhood, the broader issues were not limited to one broker. The Options Clearing Corporation declared that the options should be closed on a broker-to-broker basis, sending investors digging through their options agreements to figure out next steps. 
Scott Sheridan, the CEO of tastytrade, said the OCC’s decision meant the firm had to work with customers individually to help close out their positions.
“It’s unusual to see the OCC kind of wash their hands of a situation. They are the judge, the jury and execution for all options-related matters,” he said. 
Similarly, in a post on Reddit, Fidelity explained that investors who held put options would likely need to call a company representative in order to exercise the put option. Creating the necessary short position would require posting a cash margin of $10 per share, even though Fidelity had marked the price of Signature and SVB down to zero. 
The trades with simple put options were relatively easier to figure out, but some accounts had put-spread positions that include multiple options and were trickier to unwind, Sheridan said. Some others had short put positions, requiring them to buy the stock at the strike price, which resulted in losses for the traders.
Additionally, Sheridan said, there are regulatory minimums for margins that brokerages have to impose on short positions and sometimes additional margin is necessary for risk management for the firms — not a way to generate more profit. 
“Customers never want to hear from a risk margins department, because that means something doesn’t look good to the firm. But there’s a reason firms have risk margins department. You just have to control the business. We had a couple of accounts that were debit, but from my perspective, it was a minor wound for us relative to what was out there,” Sheridan said. 
Another wrinkle is that some types of accounts, including retirement accounts, are not allowed to hold short positions, which created additional steps for traders and brokers to close out the trade. 

Lingering uncertainty

Even once Davies was able to enter his short position against Signature Bank, the stress of the trade did not go away. He said there was concern about whether the stock would begin trading at a higher price as options traders rushed to close out their positions, leaving him with only a small gain or even, in theory, a loss on the trade. 
“I was super nervous about that, that they would close it out at some ridiculous GameStop-sort of price,” Davies said, referencing the meme-stock craze that caught some retail brokerages off guard in 2021. 
Eventually, Davies was able to cover his short position at just 20 cents per share — netting a nice profit. But the ordeal made him think back to the basics he preaches to his college students.
“I have to admit I had my tail between my legs, because I teach derivative securities at CU-Boulder and I teach my students not to trade derivatives and to be passive investors,” Davies said.  More

American demand for international travel has surged.
That has led to a backlog of U.S. passport applications. It’s taking as much as four months for a routine passport application, when factoring in processing and mailing time.
Delays are likely to worsen as we enter the busier travel season, the U.S. State Department said.
You may need to renew a passport even if it’s expiring within six months after a trip.

Greg Blomberg | EyeEm | Getty Images

Passport delays are due to ‘unprecedented’ demand

The passport backlog has grown in recent months as Americans unleash pent-up wanderlust and take trips abroad that they couldn’t earlier in the pandemic. The U.S. State Department must also restaff positions that were reassigned or eliminated as passport demand cratered in 2020.
Passport demand has been “unprecedented,” Secretary of State Antony Blinken told Congress in March.

U.S. Secretary of State Antony Blinken testifies during a House Appropriations Committee hearing on the State Department 2024 budget on March 23, 2023 in Washington.
Sha Hanting/China News Service/VCG via Getty Images

Weekly applications have been about 30% to 40% above last year, he said. While demand is typically seasonal, with the busy season running from March to late summer, “basically it’s full time now,” he added.

The department received 500,000 applications during some weeks over the winter — a record for that time of year and exceeding the State Department’s official projections.

How long it takes to get a U.S. passport

As of March 24, travelers waited 10 to 13 weeks for processing of a routine passport application, the State Department said. (A traditional passport — a passport book — costs $130 to renew; there’s an additional $35 acceptance fee for first-time applicants.) Even an expedited application, which costs an extra $60 plus delivery fees, still takes seven to nine weeks.
For those who apply by mail, the delay will be longer. It might take up to four additional weeks for an office to receive and then mail back a new passport, according to the State Department — meaning the total processing time may be more than four months for a routine application.
Processing times are likely to rise further as the busier travel season approaches, the department said.

The only way you can really deal with this is to get ahead of the problem.

Charles Leocha
chairman of Travelers United

Since applicants generally must send in their current passports, they’d be unable to travel abroad for that length of time, too, Leocha said.
The department has been hiring staff to boost processing capacity — to ensure customer service phone lines are manned, for example, Blinken said. It has opened satellite offices and authorized overtime pay, and there’s a federal task force to marshal the efforts, he added.

A soon-to-expire passport may not allow for travel

U.S. passports are generally valid for 10 years. They’re valid for five years if issued before age 16.
Importantly, Americans may not be allowed to travel if their passport expires within a few months after their trip.
For example, the Schengen Area requires a U.S. passport be valid for at least 90 days beyond a traveler’s intended date of departure from the region. The Schengen Area encompasses 27 countries in the European Union.
Many countries in the Asia Pacific and Middle East require at least six months of validity for permission to enter. Other areas, such as Hong Kong and Macau, require one month.

“Even if you don’t have a trip on the books yet, but your passport is going to expire sometime in the first half of 2024, I’d absolutely just renew it now,” said Sally French, a travel expert at NerdWallet.
You may also need to apply for a separate visa to enter certain nations — a process that requires additional time and planning. The State Department website has information about passport and visa requirements for specific countries.
The State Department encourages Americans to apply for passports “well in advance of any planned international travel to avoid last-minute issues.”

Expedited options may be available

Travelers may be able to get a more expedited passport for urgent travel if they have an international trip within 14 days.
These appointments must be in person at a passport agency, which are typically near major cities, and may be hard to get given current demand, French said. You must have proof of immediate international travel, such as airline or cruise tickets.
Travelers may be able to get a passport within three business days only in cases of emergency such as a serious illness, injury or death in one’s immediate family.
Those who are worried about not getting their passports in time for an upcoming trip “should go directly to a passport office here in the U.S. and see if they can get it done earlier,” Leocha said.
Ultimately, the backlog and delays will ease, he added.
“The problem is, that doesn’t help you today,” he said. “You’ve got to plan ahead.” More