Thursday’s Option Alerts
Economic data boost stocks. Tech issues started
off weak due to McData’s
(
MCDT |
Quote |
Chart |
News |
PowerRating) profit warning, but later turned green.
Airline and Biotech issues were particularly strong. New factories order came in
as expected. Inventories fell 0.6%, which was the twelfth consecutive decline.
This is evidence that factories are working off excess inventories. The Fed’s
Beige Book carried a slightly positive tone to current economic conditions, but
still pointed to mixed signals. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened on its
highs and closed slightly below its open. This shift in intraday sentiment
today does suggests that fear is beginning to creep back up. Today’s action
triggered a CVR II sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up and opened on its high and
closed slightly near its lows. This intraday shift in sentiment suggests fear is
dropping. The VXN did not trigger any CVR signals today. Remain cautious as
volatility is still at dangerously low levels.
Points of Significance:
Shares of SeaChange International
(
SEAC |
Quote |
Chart |
News |
PowerRating)
dropped over 16% on over 10 times average volume. Despite reporting fourth
quarter earnings that beat expectations, the shares were still under pressure
today after yesterday’s announcement that they lost a contract to provide video
on demand (VOD) technology to Time Warner Cable. There is heavy activity in the
July 22.50 puts.
Sony
(
SNE |
Quote |
Chart |
News |
PowerRating) jumped over 6% today on
double average volume. Shares of the diversified entertainment company were
strong today as the economic data suggest that an economic recovery was
under way. Implied volatility on Sony is somewhat low and could warrant option
buying.
Computer Associates
(
CA |
Quote |
Chart |
News |
PowerRating) rose 8% on
double average volume. The shares have been cut in half recently due to
investigations about accounting practices. According to filings with the SEC,
three insiders have purchased CA shares on the open market. There is heavy
activity in the August 15 calls.Â
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 22.18 | UP .25 |
CVR II |
4.58 % Below |
Not at Extreme |
| VXN | 42.90 | UP .62 |
NONE | 3.7% 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 |
| SeaChange Int’l |
SEAC | – 16.27 |
2243 | 498 |
| Computer Associates |
CA | + 8.29 |
28785 | 12074 |
| Sony Corp |
SNE | + 6.16 |
732 | 256 |
| Caremark RX |
CMX | + 6.86 |
5329 | 754 |
| Williams Cos. |
WMB | + 6.17 |
12179 | 5069 |
| Goodrich B.F. |
GR | + 4.11 |
1543 | 515 |
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 |
| TECO Energy |
TE | 20.8 | 17.2 | 31.1 | 15.9 |
| XCEL Energy |
XEL | 23.6 | 21 | 31.8 | 23 |
| Novartis AG |
NVS | 23.7 | 21.1 | 34.4 | 22.1 |
| Airgate PCS |
PCSA | 108.9 | 98.7 | 98.2 | 51 |
| Unilever N.V. |
UN | 20.3 | 18.4 | 36.2 | 19.1 |
| Ameripath | PATH | 82 | 74.5 | 56.1 | 40.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Basic Industry SPDRs |
XLB | 20.5 | 25.4 | 42 | 25.7 |
| ServiceMaster | SVM | 24.6 | 29.9 | 33.8 | 22.6 |
| Sempra Energy |
SRE | 25.1 | 29.5 | 39.8 | 28.6 |
| Calpine | CPN | 103.3 | 121.3 | 133.2 | 60.2 |
| Imclone Systems |
IMCL | 88.8 | 102.8 | 132 | 45 |
| Banc One |
ONE | 26.4 | 30.1 | 51.3 | 25.3 |
Please use stops on every trade!