Tuesday, March 29, 2011

Monster Worldwide (MWW) - Vol Explodes, Calls Trade, Skew Bends

MWW is trading $15.49, up 1.3% with IV30™ spiking up 18.6%. The LIVEVOL® Pro Summary is below.


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Monster Worldwide, Inc. (Monster) provides global online employment solution.

I wrote about this company for TheStreet.com this mornin', so I'll skip the individual trade analysis.

The company has traded nearly 12,000 contracts on total daily average option volume of just 2,204. All but 535 contracts have been calls yielding a 21.3:1 call:put ratio. The action has been in the Apr 16 17, 18 calls where ~10,000 contracts have traded. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the calls are mostly opening (compare OI to trade size). Given the vol move the circumstantial evidence points to purchases as the substantial side -- though the Apr 17 calls do look like they were offered down... I'm just sayin'. Having said that, Apr vol is up 15.9 points or 33% today.  This does have the feel of takeover rumor order flow...

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

The story gets interesting right about now... While the upside skew in Apr is bid, the upside in May is a bit muted (relatively). Ok, so what? I believe that MWW has earnings due out in late Apr/early May which means that the upside with an embedded earnings date is cheaper than the front month without earnings.

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).

I've highlighted three things. The first two in the top portion are stock gaps. This stock can move size, fast and often. On the vol side, we can see that IV30™ is just now breaching the HV180 (long-term historical realized vol).

Possible Trades to Analyze
Gotta leave this blank for this one...

This is trade analysis, not a recommendation.

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