Wednesday’s Options Alerts
The major market averages headed south today as news
that the U.S. consumer confidence fell for the fifth consecutive month. Stocks
did go sharply lower in the morning, but recovered somewhat after positive
comments made by Federal Reserve Governor Laurence Meyer. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened
near the top half of its range and closed near the middle of its range today. The
intraday shift in sentiment is telling us that fear is creeping back up
slightly. No CVR signals were triggered by the VIX. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened
near the middle of its range and closed a little under its open. The VXN’s intraday action also
suggests that fear is starting to creep back up. The VXN triggered a both CVR
II and CVR
VI sell signals today. Both volatility indices are starting to work
off their overbought conditions. However the pattern of morning weakness and
afternoon recovery has been very common over the last two weeks.
Points of Significance:
Red Hat
(
RHAT |
Quote |
Chart |
News |
PowerRating) jumped almost 27% today on news that it agreed to provide support and service on its alternative
operating system for IBM servers. The stock gapped out of a multi-month cup
& handle on over twelve times its average trading volume. Red Hat’s options volume was heavy, as it traded
almost four times its average contract volume. There was heavy activity in the
December 7.50 and December 10
calls. Incyte Pharmaceuticals
(
INCY |
Quote |
Chart |
News |
PowerRating) gained over 17% as investors are
hoping that its two new executives will drive the genetic information database
company into the more profitable business of making drugs. Options activity was
heavy, as it traded over seven times its average contract volume. There was heavy activity
in the March 15 calls.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 25.21 | – .03 | NONE | 4.65 % Under | Not At Extreme |
| VXN | 49.27 | + 1.05 |
CVR II, VI SELL |
6.68 % Under |
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 |
| Red Hat | RHAT | + 26.78 | 1719 | 430 |
| Cell Genesys |
CEGE | + 20.43 |
2308 | 174 |
| Incyte Pharmaceuticals |
INCY | + 17.29 |
1057 | 149 |
| SBA Communications |
SBAC | + 11.02 |
485 | 221 |
| S1 Corporation | SONE | + 9.40 | 1382 | 194 |
| Entrust Technologies |
ENTU | + 8.67 |
383 | 190 |
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 |
| XCEL Energy | XEL | 30.5 | 26.6 | 31.6 | 23 |
| Bard Inc. | BCR | 48.5 | 42.4 | 53.2 | 19 |
| Art Technology Group |
ARTG | 141.1 | 124 | 118.1 | 101.5 |
| Olin | OLN | 45.8 | 40.4 | 56.9 | 31 |
| Ralston Purina | RAL | 18.1 | 16.1 | 29.9 | 13.3 |
| Precise Software Solutions |
PRSE | 96.3 | 85.7 | 107.5 | 78.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Enron Corp. | ENE | 136.8 | 183.5 | 143.3 | 41 |
| Financial SPDR |
XLF | 22.2 | 27.7 | 41 | 20.4 |
| Usec Inc. | USU | 45 | 55.5 | 61.5 | 45.2 |
| Reckson Associates Realty | RA | 23.5 | 28.2 | 31.9 | 21.5 |
| Petroleum Geo-Services | PGO | 66.6 | 75.8 | 101.6 | 47 |
| Avista | AVA | 39 | 44.3 | 61.8 | 40.2 |
Please use stops on every trade!