Wednesday, May 11, 2011

Skechers (SKX) - Skew Bends on Order Flow; Trades Open

SKX is trading $18.35, up 2.0% with IV30™ up 19.1%. The LIVEVOL® Pro Summary is below.


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Skechers U.S.A., Inc. (Skechers) design and market Skechers-branded contemporary footwear for men, women and children under several lines. I believe CNBC highlighted this stock today as one near a 52 wk low that might be ready for a pop. Please verify this, I'm just guessing...

I posted a note to on this one, so no specific trade analysis.  The company has traded over 10,600 contracts on total daily average option volume of just 2,906. The action has been in the front month calls with an overall 20.8:1 call:put ratio. The Stats Tab and Day's biggest trades snapshots are included (below)..

The Options Tab (below) illustrates the action. May 19 calls have traded over 5,300x. May vol is up 10.2 points (or ~30%) while Jun vol is up 6.6 points (or ~18%).

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

Here's where it gets interesting. The front month skew is super bid while the back isn't as much. Also, the ATM strike (18) has the same vol in both months. In English, there are skew spreads on the board for month-to-month calendars or intra-month call spreads.

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 stock's slow slide downward and the abrupt vol pop today. Overall, 43 vol feels about fair(ish) when compared to the short-term and long-term historical vols (blue and pink lines).

Possible Trades to Analyze

This is trade analysis, not a recommendation.

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