Tuesday, March 30, 2010

United Rentals (URI) - Vol Buyer into Earnings

URI is trading 9.38. Earnings are estimated for the end of April (May option cycle). The LIVEVOL™ Pro Summary is below.

The company has traded over 5,500 options in the first 2 hours on total daily average option volume of just 679. The May 10 calls (purchases) are the bulk of trading. All the trades are calls (zero puts have traded). The Stats Tab and Day's biggest trades snapshots are included (click either image to enlarge).

The stock has traded actively today - already 1.6 million + shares on a total daily average of 1.5 million. The stock stats are included (click to enlarge).

This could mean the calls are trading with stock and getting turned into straddles (or puts). Either way, this position is long vol going into earnings.

The Options Tab (click to enlarge) illustrates that the calls are mostly opening (compare OI to trade size). You can also see that May vol is up 2.1 points while all other months are down.

The Skew tab shows the divergence between the 10 strike in May and the other months - namely the 10 strike vol is rising relative to other months as the buying continues on that line.

Finally, the Charts Tab (6 months) is below (click to enlarge). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue). The yellow shaded area at the very bottom is the IV60™ vs. the HV60™ vol difference.

You can see the run up in stock recently as well as the IV30™.

This is trade analysis, not a recommendation.

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