Thursday, April 28, 2011

Goodyear Tire (GT) - Calls Trade Size, OI Opens Ahead of Earnings

GT is trading $16.24, up 0.5% with IV30™ up 5.9%. The LIVEVOL® Pro Summary is below.


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The Goodyear Tire & Rubber Company (Goodyear) is a manufacturer of tires. The Company, along with its subsidiaries, is principally engaged in the development, manufacture, distribution and sale of tires and related products and services worldwide. Eddy Altamirano alerted me this one. Earnings are due out on 4-29-11, I believe (check that).

This is another pre-earnings note. For the naturally curious, check out what VCI today after the earnings call, then look at that pre-earnings order flow here:
Valassis Communications (VCI) - Pre-earnings Order Flow and High Vol

Just a quick disclaimer -- it's pretty rare that the above actually occurs.

GT has traded over 13,000 contracts on total daily average option volume of just 7,112. More interesting, calls have traded on an 11:1 ratio to puts with more than 10,000 calls changing hands on the Jun 17 line -- substantially purchases in my opinion. 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). Now, check out that OI in the May 17 calls -- hello... 25,000.. That OI was in the hundreds as of 4-25-2011 and has opened up just in the last 5 days (or whatever). I actually can't tell if it's long or short, though.

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

Notice that the skew chape hasn't changed, other than the 18 line in both months which is slightly bid. Hmm...

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 the IV30™ is elevated as earnings approach. The stock was stuck in a range for some time and has broken out a bit to the upside. The HV20 feels almost artifically low, and the HV10 is below 20...

Possible Trades to Analyze
Well, ya know. You can bet with order flow or againt it. Or do nothing, I dont see any obvious skew trades.

This is trade analysis, not a recommendation.

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