Tuesday’s Options Alerts
The major market
averages traded in the red for the majority of the day, but a final hour rally
helped push the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) and the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) into positive
territory. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened and
closed near the lows of the day. This shift in intra-day sentiment is showing that fear is declining. No CVR signals were triggered today.
However, the
VIX is getting more oversold thus the market is getting more overbought. We
are close to getting a couple of CVR sell signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened in the upper half of its range and closed right on its lows. This shift in intra-day
sentiment also suggests that fear is declining. The VXN triggered a CVR
VI sell signal. In addition, it is also setting up for a couple of CVR sell
signals. Caution should be taken as both volatility indices are at precariously
low levels, this could spell trouble ahead. Put options could be utilized, as volatility
is low.
Points of Significance:
Hotel Reservations Network
(
ROOM |
Quote |
Chart |
News |
PowerRating) gained 18% on
over 15 times its average volume. The company reported fourth quarter earnings that
increased over 22% from the same quarter a year ago. In addition, the earnings
were ten cents above consensus estimates. Hotel Reservations also projected
earnings for 2002 and 2003 that were above analysts’ expectations. There is heavy activity in the
April 50 calls.
The biotech sector has been very weak for the
last three trading sessions and Affymetrix
(
AFFX |
Quote |
Chart |
News |
PowerRating) was no exception. The
stock dropped 16% on 10 times its average volume, apparently on a report
recommending the short sale of AFFX. The company is scheduled to
report its fourth quarter results after the close on Wednesday. There is heavy
activity in the February 30 puts, March 22.50 puts ,and March 30 puts.
Airline stocks did not care about the collapse of
the proposed alliance between American Airlines and British Airways, as airline
issues were among the strongest performers today. Frontier Airlines
(
FRNT |
Quote |
Chart |
News |
PowerRating)
lead the pack as it gained 10% on almost five times its average volume. Its
options traded over double its average volume.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 21.78 | DOWN 0.15 |
NONE | 8.49 % Below |
Not At Extreme |
| VXN | 43.06 | DOWN 2.61 |
CVR VI SELL |
9.8 % Below |
Near Extreme |
Abnormal Options Volume With Price Movement
— Abnormal options volume (calls and puts) with stock price movement
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Hotel Reservations |
ROOM | + 18.04 | 1563 | 123 |
| Travelocity | TVLY | + 16.97 |
2550 | 315 |
| Affymetrix | AFFX | – 15.95 | 6454 | 715 |
| ACLN Limited |
ASW | + 12.78 |
3923 | 1766 |
| Frontier Airlines |
FRNT | + 10.72 | 273 | 101 |
| Expedia Inc. |
EXPE | + 8.55 |
6665 | 1311 |
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 |
| Kinder Morgan Energy |
KMP | 31 | 19.9 | 32.3 | 20.2 |
| Harrah’s Entertainment |
HET | 43.1 | 33.4 | 51.8 | 33.2 |
| Argosy Gaming | AGY | 51.9 | 40.4 | 41.9 | 30.1 |
| Banc One |
ONE | 25.6 | 21.7 | 51.3 | 23.9 |
| Affymetrix | AFFX | 82.2 | 69.8 | 99 | 67.1 |
| El Paso Corp. |
EP | 55.5 | 49.7 | 61.4 | 35 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Dal-Tile | DTL | 23.4 | 31.7 | 33.3 | 27.1 |
| Telecorp PCS. |
TCLP | 43.8 | 55.2 | 63.2 | 49.3 |
| Citizens Communcations |
CZN | 39 | 48 | 56.3 | 40.7 |
| Puget Energy |
PSD | 19.1 | 23.2 | 28.7 | 23.4 |
| J.C. Penny | JCP | 66.1 | 79.8 | 61.9 | 45.5 |
| Travelocity.com | TVLY | 64 | 74.7 | 116.4 | 73.9 |
Please use stops on every trade!