Tuesday’s Options Alerts
Trading was long and boring on this
pre-Memorial Day trading day. Today was also the lowest-volume trading session of
the year. The major averages headed modestly lower on negative news from Sun
Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating), a downgrade of the semiconductor sector, and a lower-than-expected GDP report. Tech issues took a beating today after Sun
Microsystems basically said that business was slow. Semiconductor issues
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
were especially weak after Goldman Sachs downgraded the whole sector. On the
economic front, first quarter GDP was downwardly revised to 5.6% from the
previously announced rate of 5.8%. Economists were expecting the economy to grow
by 6%. Showing a sign of strength, new home sales rose 1% to 915,000 out pacing
the 883,00 estimate. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) had an inside
day today. It opened near the mid-point of its range and closed just above its
open. There was no significant shift in intraday
sentiment. No CVR signals were triggered
today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also had an inside day. It opened near the top of its range and close
near the lows of the day. This does suggest some decrease in fear, however due
to the light volume day, its significance is diminished. The VXN didn’t trigger
any CVR signal today.
Points of Significance:
Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating) jumped over 22% on
seven times its average volume. The shares jumped today after the
company’s psoriasis drug Amevive won FDA approval. Shares of Biogen stayed
strong throughout the market day unlike its many other biotech counterparts.
Biogen is also close to forming a bow tie.
Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating) fell a little
over 2% on half its average volume. Shares of Ebay formed an inside bar today
and dipped back below its 200-day moving average. Its implied volatility is low
compared to historical volatility. Look for opportunities in outright option
purchases or backspreads.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.16 | UP 0.81 |
NONE | 2.17 % Below |
Not At Extreme |
| VXN | 42.86 | DOWN 0.34 |
NONE | 2.94 % Below |
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 |
| Biogen | BGEN | + 22.69 |
31759 | 10150 |
| Marvell Technology |
MRVL | – 8.98 |
5156 | 726 |
| Kulicke & Soffa |
KLIC | – 5.91 |
1593 | 215 |
| Human Genome Sciences |
HGSI | – 5.34 |
1018 | 333 |
| Veritas | VRTS | – 4.96 |
197.9 | 2377 |
| Genentech | DNA | – 4.08 |
5028 | 1027 |
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 |
| Allied Capital Corp. |
ALD | 50.9 | 42.5 | 41.1 | 21.5 |
| Glaxosmithline | GSK | 31.4 | 26.3 | 28.8 | 21.1 |
| Financial Sector SPDRs |
XLF | 18.5 | 15.6 | 26.3 | 13.6 |
| AK Steel Holdings |
AKS | 45.3 | 38.6 | 59.4 | 38.6 |
| Plum Creek Timber |
PCL | 18.9 | 16.4 | 26.4 | 17.2 |
| NPS Pharmaceuticals |
NPSP | 102.6 | 89.9 | 80.4 | 50.3 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Biogen | BGEN | 39.7 | 59.9 | 61.7 | 35.8 |
| KeyCorp | KEY | 17 | 22 | 29.9 | 20.9 |
| Pacific Century |
BOH | 21.5 | 24.7 | 32.1 | 25.5 |
| Wachovia Corp. |
WB | 21.3 | 24.2 | 29.6 | 19.7 |
| Biotech HOLDRs |
BBH | 36.4 | 40.7 | 42.4 | 27.5 |
| Charles River Labs |
CRL | 36 | 39.6 | 51.1 | 35.6 |
Please use stops on every trade!