Friday’s Options Alerts

  • March 7, 2003
  • Chris Tyler

Home on the range….since our
last report, the VIX and VXN have become more accustomed to their comfortable
digs on the daily charts. The ETFs were
all up today, on better than average volume, and right back into their
respective trading ranges. To say the least, for the momentum and swing traders,
the same time frame for which many of our option strategies look to capitalize
on, this has been a time to stay disciplined in our trading.

The environment has been difficult, but it’s our
job as options traders to get through whatever the market throws at us by
adjusting our trading to the conditions at hand. The best way to do this of
course is…..to have a crystal ball? No, the best way to for us to profit, as
always, is by executing only when price, volume, and options give us the go
ahead. And of course, as always, “to get ahead, ya’ gotta stay
spread”. 

Not much has changed with volatility levels, as
they remain captive within their respective ranges, but we do have corresponding
CVR I buy signals triggering in both indices this evening.

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 35.65 Down
-.69		       
CVR I		 .001%
Above 		Not
at Extreme
VXN 46.38 Up + .73       
CVR I		 .019% Above Not
at Extreme

 

Abnormal Options Volume — This list
includes both percentage movers that are normally associated with an increase in
options activity, as well as stocks that have unusually high activity and / or
technical situations,
reflecting increased speculation of a potential price move.

Name Symbol Net
% Change		 Volume Avg.
Volume
Altria 
MO		        
-4%		 87652 16009
UT Starcom
UTSI		        -7% 5400 1077
Automatic Data Processing
ADP		        -1% 2187 830

 

Stocks With Spikes in Implied
Volatility — Stocks with Increases and Decreases in implied
volatility compared to previous day. Candidates are then screened qualitatively.
These lists represent those issues that carry a blend of liquidity and/or
technical setups that might deserve further notice. 

Spike Up

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Altria
MO		 37 30 51 19.4

 

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Veritas
VRTS		 62 68 106 60.3

 

Please use stops on every trade!