Monday, April 5, 2010

Covanta (CVA) - Aggressive Bullish Position Grows

CVA is trading 17.09. The LIVEVOL™ Pro Summary is below.

The company has traded over 9,416 options in the first half hour on total daily average option volume of just 873. Zero puts have traded. The vast majority of the volume is the Jun 17.5 calls (purchases). The Stats Tab and Day's biggest trades snapshots are included (click either image to enlarge).

The stock stats are also included - note the stock volume is right where it should be to hit the average - these calls are not trading with stock.

The Options Tab (click to enlarge) illustrates that the call volume is less than the OI.

On 3-31-2010 there was a large jump in the Jun 17.5 call OI. The Level 2 pop up is included (click to enlarge).

Going to the Time & Sales Tab (click to enlarge) for 3-30-2010 looking at the Jun 17.5 calls you can see clearly that those trades were purchases as well. The implication --> the purchases today are an increase to the OI - this position is growing.

The Options Tab (above) also shows that the OI in the Jun 15 puts is very large - in fact, larger than any other line. Doing the same analysis with the Level 2 pop-up I found some opening trades on the same day: 3-30-2010... The Time & Sales Tab for that line shows these puts were sales...

So on 3-30-2010 thousands of Jun 17.5 calls were purchased for ~$0.50 and funded by the sale of thousands of Jun 15 puts ~$0.25. Today - nearly 10,000 more calls have traded (or 1000%+ of average volume) with zero puts.

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.

Note three things:
(1) Stock climb recently
(2) IV30™ limb recently
(3) Option volume climb recently (bottom volume bars)

This is trade analysis, not a recommendation.

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