Thursday’s Options Alerts…
Major market averages fell sharply lower today as
the merger between Dynegy
(
DYN |
Quote |
Chart |
News |
PowerRating) and Enron
(
ENE |
Quote |
Chart |
News |
PowerRating) fell apart. With the
S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating) and Nasdaq composite
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) gaining over 19%
and 36% respectively since the September 11 attacks, the much-needed
correction is now upon us. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up and opened near the
middle of its range and worked its way higher to close just below the highs
of the day. This intra-day shift in sentiment
suggests that fear is on the rise, as concerns about the weakening economy still
plague the markets. No CVR signals were triggered today. Likewise the VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
exhibited the same behavior as the VIX, as it too gapped up on the open and closed near
its highs for the day. This intra-day shift in sentiment is also telling us that
fear is creeping back up. No CVR signals were triggered by the VXN either.
Points of Significance:
Dynegy Inc.
(
DYN |
Quote |
Chart |
News |
PowerRating) broke below its 20- and
50-day moving averages on five times its average daily volume, as they called off
their planned acquisition of Enron Corporation. Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating) jumped over
11% today as analysts are very optimistic about their business prospects for
this upcoming holiday season. There is very heavy activity in the December 5
calls. Shaw Group
(
SGR |
Quote |
Chart |
News |
PowerRating) fell over eight percent today on heavy volume. No
news was cited. Shaw’s options traded almost seven times its average volume.
There is heavy activity in the December and January 25 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 27.84 | UP 2.63 | NONE | 5.57 % Over | Not At Extreme |
| VXN | 52.21 | UP 2.94 | NONE | 0.004 % Under |
Not At Extreme |
Abnormal Options Volume With Price Movement
– Abnormal options volume (calls and puts) with stock price movement
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Dynegy | DYN | -12.03 | 35811 | 9972 |
| Gateway | GTW | + 11.18 |
2043 | 581 |
| Calpine | CPN | – 9.40 |
20149 | 5737 |
| Network Appliance |
NTAP | – 8.37 |
14230 | 6850 |
| Shaw Group, Inc | SGR | – 8.30 | 7477 | 1079 |
| Biopure Corporation |
BPUR | – 7.61 |
916 | 329 |
Stocks With Biggest Spikes in Implied
Volatility – Stocks with biggest increases or decreases in implied
volatility compared to previous day.
Spike Up
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Citigroup | C | 34.9 | 29.3 | 52.6 | 27.9 |
| Calpine | CPN | 73.8 | 62.1 | 78.9 | 53.3 |
| Morgan Stanley Dean Witter | MWD | 47.4 | 40.1 | 70.5 | 39 |
| Guilford Pharmaceuticals | GLFD | 95 | 71.5 | 95.9 | 56.8 |
| TIVO Inc. | TIVO | 92.3 | 79.2 | 121.9 | 82.3 |
| Williams Company | WMB | 50.1 | 43.1 | 52.3 | 35.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Hollinger International | HLR | 35.3 | 49.3 | 51.3 | 27 |
| Financial SPDR | XLF | 21.9 | 28.2 | 41 | 20.4 |
| Avista | AVA | 39.4 | 49.6 | 61.8 | 40.2 |
| ServiceMaster | SVM | 22.7 | 28.1 | 37.7 | 21.5 |
| Ralston Purina | RAL | 14.8 | 18.1 | 29.9 | 13.3 |
| Reckson Associates | RA | 24.1 | 29.4 | 31.9 | 21.5 |
Please use stops on every trade!