Friday, October 29, 2010

EnCana (ECA) - Vol Explodes Again on Rumors

ECA is trading $28.10, up 1.7% with IV30™ up 19.7%. The LIVEVOL™ Pro Summary is below.


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I wrote about ECA on 9-30-2010: ECA (EnCana) - Vol Explodes, Front Month Calls in Play

The title could have been the same today. The stock was trading $29.78 at the time with IV30™ up to 41.27 which was a 40% jump that day. Eddy Altamirano drew my attention to this one today.

Today the company has traded 16,437 options on total daily average option volume of just 6,036. Again, the action is in the calls, with a nearly 9:1 ratio to puts. The front month calls have traded over 10,000x. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the Nov 29 and 30 calls are mostly opening (compare OI to trade size). Note that Nov vol is up 8.1 points while Dec is up 3.2.

The Skew Tab snap (below) illustrates the vols by strike by month.

Crazy upside bend in the front month. I have also included the Skew Tab snap from the 9-30-2010 post (below). Basically the same chart, right?

Finally, the Charts Tab (6 months) is below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

After the last takeover rumor bonanza in this stock (highlighted in chart), the price peaked to $30 (ish) and IV30™ exploded to nearly 43. But since, the stock dropped to the $27 range and IV30™ fell to under 29. And, today... Again... Stock up, IV30™, really up. Will history repeat itself, or will something actually happen this time?....

This is trade analysis, not a recommendation.

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