Thursday’s Options Alerts

  • May 1, 2002
  • TradingMarkets Editors

A drop in the April ISM index and the
resignation of Sun Microsystem’s
(
SUNW |
Quote |
Chart |
News |
PowerRating) President and Chief Operating
Officer, Ed Zander, were the catalyst for the early morning sell-off. However the
Dow came back from triple digit losses to end the day with triple digit gains.
The Nasdaq attempted to rally, but tech stocks stayed contained with the news
from Sun and Overture Services
(
OVER |
Quote |
Chart |
News |
PowerRating). Strongest movers for the day were
consumer stocks such as Coca-Cola
(
KO |
Quote |
Chart |
News |
PowerRating) and Phillip Morris
(
MO |
Quote |
Chart |
News |
PowerRating). Oil and
gold were also notable performers. Anything tech or Internet related were under
pressure. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near its highs and closed near the lows of the day.
Once again, this shows a decrease in fear. No CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)  opened and closed near the midpoint of its range. Not much
of a change in sentiment occured. No CVR signals were triggered today
either. 

Points of Significance:

Overture Services
(
OVER |
Quote |
Chart |
News |
PowerRating) dropped
over a third of their value on
almost eight times its average volume. The shares were dumped today as America
Online
(
AOL |
Quote |
Chart |
News |
PowerRating) decided to drop Overture in favor of Google in providing web
searches. The shares have now broken below their $23 support level. Checkout the
June 25 puts.

Cox Communications
(
COX |
Quote |
Chart |
News |
PowerRating) gained 6% on
double its average volume. The were up in sympathy on news that Charter
Communications posted a smaller than expected loss on stronger revenues. Despite
today’s pop, the shares are still in a steep downtrend and has significant
Fibonacci resistance ahead. However there is very heavy activity in the June 30
calls.

Shares of group health insurance
provider Pacificare Health Systems
(
PHSY |
Quote |
Chart |
News |
PowerRating)
jumped almost 5% on double its average volume. However the shares fell to $30.55
in after hours trading. Excluding goodwill charges, the company reported
earnings that beat estimates. However revenues did fall due to a decline in
membership. Checkout the June 30 puts.

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 22.31 DOWN
1.20		 NONE 1.98%
Below		 Not
At
Extreme
VXN 43.91 UP
0.15		 NONE 6.32
% Above		 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
Overture
Services		 OVER –
35.68		 15650 2241
J.D.
Edwards		 JDEC –
11.80		 4125 1307
Cox
Communications		 COX +
6.46		 2174 640
Pacificare
Health Systems		 PHSY +
4.75		 6098 1407
Citrix
Systems		 CTXS –
4.56		 6174 1296
Wyeth WYE +
4.01		 6074 2680

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
Aquila ILA 51.9 42.6 31.5 28
Simplex
Solutions		 SPLX 36.3 30.1 92.5 65.3
New
Plan Excel Realty		 NXL 23.6 19.9 31.7 17.5
United
Surgical Partner		 USPI 42.4 36.5 71.8 35.5
Xcel
Energy		 XEL 19.1 16.5 31.8 18.1
Transkaryotic
Therapies		 TKTX 87.6 76.4 66 50.7

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Basic
Industries SPDRs		 XLB 14.9 22.5 42 16.8
Crescent
Real Estate		 CEI 20.6 27.4 30.6 20.1
Financial
Sector SPDRs		 XLF 15.5 20.3 28.2 14
Canadian
National Railway		 CNI 22.1 27.4 36.6 22.5
CMS
Energy		 CMS 33.7 40.9 36.4 26
Puget
Sound Energy		 PSD 22 26.2 28.7 22.3

Please use stops on every trade!