Wednesday’s Option Alerts

  • March 25, 2003
  • Chris Tyler

Since we last left off the
ETFs were pressing ever skyward. Clear
sailing conditions actually produced two more days of glorious gains, from the
darkest reaches of the abyss seen the prior week. Monday witnessed the first
storm seen by investors in over a week and a half as the market tides forced the
ETFs to give back close to half of their hard earned journey. Tuesday, while
starting out cautious, gave way to investors bidding up prices on heavier, but
less than average volume. The major indices all finished in the green, up
between .5 and 1.5% on the session.

Hopefully, as an options trader you took some
refuge in a quality spread before yesterday’s hurricane punished those who
stayed out unprotected. Myself, you ask?  I had battened down the hatches a
bit early and admittedly missed out on the last leg of our trip North. Oh well,
tomorrow’s another opportunity, and surely sometime in the near future the
market will present another reason why we choose to stay spread, in order to
stay ahead of the curve.

The VIX is registering a CVR VI Sell signal while
the index tests the lower bounds of its daily trading range. As always, price
and volume in the ETFs are our first guide, but the fresh volatility signal,
coupled with our charting, suggest preparing for a short entry on either price
resistance at higher levels, or failure of the markets, as the recent lows are
taken out. And of course, this always makes the most sense when we take
advantage of market gyrations by establishing our positions with option spreads.

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 32.66 Down
-2.54		       
CVR VI SELL		 8.30%
Below 		Not
At Extreme
VXN 45.00 Down
-1.36		       
NONE		 3.58%
Below 		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
Airborne 
ABF		        +10% 25139 1187
Coach
COH		        +5% 8113 716
SanDisk
SNDK		        -1% 7172 1960

 

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

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Spike Down

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we were unable to retrieve the following category.

 

Please use stops on every trade!