Tuesday’s Options Alerts
Stocks were under pressure
today as news from tech giants Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) and IBM
(
IBM |
Quote |
Chart |
News |
PowerRating) weighed
heavily on the market. Late Thursday, Microsoft came out with third
quarter earnings that exceeded Wall Street’s expectations. However, they did lower
their fiscal 2002 projections. IBM also beat analyst’s earnings estimates, but its
revenues were about $1 billion short of estimates. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened in the upper half its range and closed
in the lower half. There was no significant change in intra-day shift sentiment.
No new CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near its high and closed in the lower half of its range. There was also
no significant shift in intra-day sentiment. The VXN did not trigger any signals
today either. Both volatility indices are showing that fear is increasing as the
much-anticipated economic recovery might not happen.
Points of Significance:
Elan Corp.
(
ELN |
Quote |
Chart |
News |
PowerRating) gapped down and dropped 13% on
over nine times its average volume. The stock is being knocked today after it
suspended Phase IIa trials of its Alzheimer’s drug AN-1792. Four out of 97
patients on have developed inflammation of the central nervous system after
taking the drug. There is heavy activity in the February 35, 40, 42.5, 45 calls, as well as the February
40 puts.
Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating) jumped 12% on
triple its average
volume. The company announced second quarter earnings that topped analysts
estimates. However, there is heavy activity in the February 30 puts.
Agile Software
(
AGIL |
Quote |
Chart |
News |
PowerRating) lost 10% on above-average
volume. The stock is approaching its .618 retracement level from its October
lows. There is heavy activity in the February 20 puts. The February 20 puts
accounted for almost 85% of the option volume today. Its implied volatility is
somewhat low.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 24.37 | UP 0.63 |
NONE | 2.48 % Above |
Not At Extreme |
| VXN | 48.83 | UP 1.80 |
NONE | 0.009 % Above |
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 |
| Echelon Corp. | ELON | + 26.74 | 2285 | 250 |
| Elan Corp. |
ELN | – 13.72 |
13638 | 1803 |
| Scientific Atlanta |
SFA | + 12.18 | 12345 | 2439 |
| Silicon Storage Tech. |
SSTI | – 10.87 |
1643 | 484 |
| Agile Software |
AGIL | – 10.64 | 590 | 285 |
| Rehabcare Group |
RHB | – 10.44 |
282 | 110 |
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 |
| Elan Corp | ELN | 43.6 | 37.2 | 53.8 | 35.8 |
| Arm Holdings |
ARMHY | 84.7 | 73 | 80.3 | 67 |
| EchoStar Communications |
DISH | 39.5 | 34.6 | 72.5 | 35.8 |
| Convergys | CVG | 45.4 | 40.4 | 53.6 | 38.8 |
| Eaton Corp. | ETN | 35.3 | 31.5 | 43.0 | 26.4 |
| Pericom Semiconductors |
PSEM | 83.9 | 74.9 | 46.8 | 74.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Sysco Corp. | SYY | 27.7 | 41.4 | 44.5 | 25.6 |
| Minnesota Mining |
MMM | 37.8 | 49.5 | 47.2 | 24.2 |
| Biopure | BPUR | 69.2 | 90.2 | 95.3 | 74.1 |
| Citizens Communications |
CZN | 40.3 | 48.7 | 56.3 | 40.7 |
| Becton Dickinson |
BDX | 28 | 32.4 | 36.5 | 28 |
| United Parcel Service |
UPS | 45.4 | 40.4 | 53.6 | 38.8 |
Please use stops on every trade!