Wednesday’s Options Alerts

  • March 4, 2003
  • Chris Tyler

Since our last report, the
semis (SMH) did indeed lead the way….down.  An
initial gap higher into resistance levels left all of the ETFs, as well as the
leading semiconductor sector, reversing course within the first half hour, and
subsequently trending lower, without bothering to look back even once at those
former lofty levels. Volume continues to be light, as the geopolitical news has
kept traders on the sidelines, and the major indices very choppy within their
respective ranges.

Not much has changed with volatility levels. I’ve
previously thrown in a couple of snapshots of the VIX. It did manage to trade
slightly lower in Monday’s session, but has now rallied sufficiently within the
trading range to register…..absolutely nothing. Complacency? Maybe, especially
in the VXN, but I think the bigger issue is non participation. If the equities
aren’t trading, then the derivatives aren’t going to be the one to “wag the
dog”. On that note there are no signals this evening with the CVRs this
evening, so if you happen to see your own technical signal, the best piece of
advice I can give you is to stay prepared by reading both of my nightly reports,
as well as “staying spread to keep ahead” in a difficult market. 

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 36.43 Up
+2.34		       
None		 3.13%
Above 		Not
at Extreme
VXN 44.97 Down -.86       
None		 2.43% 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
Mercury
Interactive 
MERQ		      
 -4%		 6500 3080
Symantec
SYMC		        +1% 13055 405
Amazon
AMZN		        +2% 39989 9107
Boeing
BA		        
+1%		 8712 3419

 

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

Name Symbol IV Previous
IV		 High
IV		 Low
IV
General
Motors
GM		 43 39 76.5 27.4

 

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
EchoStar
Communications
DISH		 48.4 55.3 88.1 41

 

Please use stops on every trade!