Tuesday, March 8, 2011

Puda Coal (PUDA) - Calls Trade Size in Earnings Month

PUDA is trading $12.58, up 5.0% with IV30™ up 11.9%. The LIVEVOL® Pro Summary is below.


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Puda Coal, Inc. (Puda) is a supplier of high-grade metallurgical coking coal to the industrial sector in the People’s Republic of China (the PRC or China).

The company has traded over 15,000 contracts on total daily average option volume of just 1,875. Calls have traded on a 9:1 ratio to puts. The action is in the Apr 12 calls where nearly 12,000 have traded. The company's next earnings release is due out at the end of March (or early April). The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the Apr 12 calls are mostly opening (compare OI to trade size). The question is the side (buy or sell). This is a good lesson in order flow -- check this out.

1. Let's look to the largest trades in the Apr 12 calls today from the Time & Sales Tab (below).

I've highlighted the single largest trade -- a 500 lot trading $1.30 on a $1.30 x $1.45 market. Since it went off on the bid, it must be a sale right?... Or not... Holding the CTRL button down and clicking on the trade pops out the Level II quotes at the time of the trade (below).

We can see that PHLX went $1.30 bid for 1,573, a good dime through the next best bid on CBOE. So, in English, those trades look to be buyer initiated -- the contracts were bid up. The circumstantial confirming evidence is the rise in vol across the board, but most notably in Apr which is up more than 7 vol points (Mar is up 4.1).

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

We can see the Mar (red) and Apr (yellow) upside is bent up a bit to the order flow. This is more confirming circumstantial evidence that the orders are purchases.

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).

We can see how the stock has essentially gone nowhere of late. The IV30™ is just now approaching the long-term historical trend (HV180).

This is trade analysis, not a recommendation.

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  1. Also in PCX there is a lot of movementCoal day today ?.Ophir just a question on TIVO what the 4 legs meaning.
    Great blog guys.

  2. Thanks for the note. I didn't quite get your question on TiVo -- can you try again, please?

  3. Sure. 1st leg May 20 call 0.06 in Blue ? Sold ? is below the current bid 0.08
    2nd Aug 7 Put 1.01 Sold
    3rd Aug 8 call 2.53 Bought ?
    4th Aug 15 call 0.52 Sold
    Many thanks.

  4. Green: Traded on the offer of the NBBO.
    Red: Traded on the bid of the NBBO.
    White: Traded in between the NBBO bid and offer.
    Blue: This occurs if an option trade (1) prints late or (2) trades tied to stock at a different level.