Monday, August 9, 2010

Comcast (CMCSK) - A One Week Trade

CMCSK is trading $17.67. The LIVEVOL™ Pro Summary is below.

The company has traded over 16,000 options in the first two hours on total daily average option volume of just 2,364. 10,000+ of the contracts were done in a front month 17/18 strangle sale (one week trade) @ $0.30. The Stats Tab and Day's biggest trades snapshots are included (click either image to enlarge).

The Options Tab (click to enlarge) illustrates that the call and put volume is smaller than OI. In fact, these trades look to be closing on the existing OI. Having said that, it's an interesting trade as on open.

Trade Stats
This strategy wins at expo. (one week) if the stock is in ($16.70, $18.30).

The Skew Tab snap (click to enlarge) illustrates the vols by strike by month.

The strangle sale is 28 vol on average; hitting the top and bottom of the skew.

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 IV30™ vs. the HV20™ vol difference.

You could see a possibility of the stock staying put. I like the trade small. I'm not overly concerned with the company specific news, but this market feels ready for a big day that could move everything. If you do this strangle, sell over $0.30; I see it trading for $0.35 at least right now. If you can get it off at $0.40, covering with the Aug 16/19 strangle for $0.10 feels a touch better - still receive $0.30 total but protect.

This is trade analysis, not a recommendation.

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