Wednesday’s Options Alerts…

• December 18, 2001
• TradingMarkets Editors

Stocks rallied
sharply for the second day in a row, carrying the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
back above the psychological 2000 level. The major market averages
were helped out by the strong housing starts number and positive news
from General Electric
(
GE |
Quote |
Chart |
News |
PowerRating). Housing starts in November jumped 8.2
percent to 1.645 million, outpacing the projected 1.55 million.
General Electric also helped boost the market, as they reaffirmed
their fourth quarter and annual earnings targets. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near the highs of the day and closed near its low. Once again,
this intra-day shift in sentiment suggests that fear is still
decreasing. The VIX did not trigger any CVR signals today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
also opened near its high and closed near its lows of the day. This
intra-day shift in sentiment is also telling us that fear is
decreasing. The VXN did not trigger any CVR signals either. Fear is
continuing to decrease, as the strong housing starts number is
assuring people that we are on the road to economic recovery.

Points of Significance:

Invision Technologies
(
INVN |
Quote |
Chart |
News |
PowerRating)
dropped sharply for the second straight day as investors worry
about their capacity to meet increasing demand without expensive
outsourcing. Its options traded almost triple its average its trading
volume. There is heavy volume in the December 30 and 35 puts.
Solectron
(
SLR |
Quote |
Chart |
News |
PowerRating) dropped over 18% today on four times its average
trading volume. The company reported a first quarter loss of eight
cents a share compared with a gain of 29 cents a share for the same
quarter a year ago. In addition, Solectron reported that they will
borrow up to $2 billion in order to meet their short-term debt
obligations. Options on Solectron traded almost six times their
average volume. There is heavy activity in the December 12.50 puts.
Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating) jumped 13% on over two and a half times its
average trading volume. The stock stopped just shy of its 200-day
moving average. An analyst from Banc of America upped Siebel’s
earnings estimates for fiscal 2002 to 55 cents a share from a previous
47 cents a share. Siebel’s options traded over four times its average
volume. Bristol Meyers Squibb
(
BMY |
Quote |
Chart |
News |
PowerRating) is continuing to pull back
from lows. Bristol’s options are getting expensive, as its implied
volatility has gone to a new high.

 

 

Abnormal Options Volume With
Price Movement — Abnormal options volume
(calls and puts) with stock price movement

 

Stocks With Biggest Spikes in
Implied Volatility — Stocks with biggest
increases or decreases in implied volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!