Thursday’s Options Alerts

  • April 23, 2003
  • Chris Tyler

Not much has changed…quite
literally. The VIX was unchanged on the
session, and so is our opinion on trading the market action, and not just an
indicator. Heavier volume pushed the ETFs into higher territories, with two of
the three (the SPYs and QQQs) finishing off in unclaimed lands last trampled
upon late last year.

There continues to be a lot of “hoopla”
over the nose dive in the VIX readings. CNBC and everyone’s “Aunt
Cletus” are all over this enigma. While this action keeps them on the
sidelines nay saying the market action, the options trader has been given more
of a reason to participate. Risk to reward has been skewed in favor of trading
the market action with some exceptional value, courtesy of the “implieds”.
Straddles, strangles, gamma trading your favorite product, and possibly outright
option positions, in the context of a well defined stop loss methodology,
continue to rule the day.

Volatility levels as measured by the VIX and the
VXN are still triggering CVR signals against decidedly strong action in the ETFs.
Proceed with caution, but continue to respect price and volume as your first
guide to making trade decisions.

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 23.49 Down
.02		      
CVR 3,6 SELL		 10.51%
Below 		 At Extreme
VXN 33.13 Down
.52		        
CVR 3,6 SELL		 11.08%
Below
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
Cardinal
Health 
CAH		        -9% 17924 3876
Activision
ATVI		        +3% 1547 388
Silicon Laboratories
SLAB		        +6% 2282 995

 

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

None Today.

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Convergys
CVG		 30.9 37.4 62 34
NetiQ
Corp.
NTIQ		 61 70 91 67.3

Please use stops on every trade!