Monday’s Options Alerts
Slim pickings the day after
Thanksgiving as the markets were open for
an abbreviated session, but the Generals were nowhere to be found.
The ETFs experienced mostly listless, range-bound action for most of the half
day (I’ll chirp in with Tony Saliba when I say “thank you” to the NYSE). The
last 45 minutes brought in some selling to push the indices into negative
territory, but after Wednesday’s strong showing, and the fact that for most of
Wall Street, today is still considered a holiday, we’re not reading too deeply
into this at the moment. Monday will be back to business as normal, and we’ll
have a better gauge of the market’s next move.
The
volatility indices
(
$VXN |
Quote |
Chart |
News |
PowerRating) and
(
$VIX |
Quote |
Chart |
News |
PowerRating) both traded higher on the day.
It turns out that the volatility spike in the VIX that was mentioned here in
Wednesday’s column was actually real. Apparently, someone who didn’t bother
using proper money management got slapped by his options clearinghouse and was
forced into the position of covering a substantial short with options. We still
like what we’re seeing in the volatility indices, as fear isn’t taking a
backseat to complacency, but again, Monday should prove a much better read, so
for now turn off the monitor and enjoy the rest of your holiday.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 31.08 | Up +.24 |
CVR 1 |
6.50% Above |
Not at Extreme |
| VXN | 49.48 | Up +2.06 | No Signals |
5.38% 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,
reflecting increased speculation of a potential price move.
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Semis HOLDR |
SMH |
-1% |
59233 | 27352 |
| Medimmune | MEDI |
-3% |
7883 | 2746 |
| Sealed Air |
SEE |
+52% | 15490 | 3901 |
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 |
| Prepaid Legal |
PPD |
86.2 | 80.2 | 136 |
62 |
| Medimmune |
MEDI |
84.5 | 76.2 | 109 | 38.8 |
| Forest Labs |
FRX |
32.7 | 28 | 50 | 26.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Sealed Air |
SEE |
74 | 102 | 121 |
37.3 |
| Office Depot |
ODP |
35.8 | 38.8 | 60.8 | 31.8 |
Please use stops on every trade!