Thursday, May 5, 2011

UPDATE: BMC Software (BMC) - Earnings Bet Wins

BMC is trading $52.63, up 7.3% with IV30™ down 25.5% on earnings. The LIVEVOL® Pro Summary is below.


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A full blog to come on another issue, but this is a quick update on a note I posted two days ago -- 5-3-2011. You can read that post here:
BMC Software (BMC) - Earnings Bet To the the Upside

A quick re-cap of the order flow on 5-3-2011:
"The company has traded over 22,000 contracts on total daily average option volume of just 1,802. Calls have traded on 166:1 ratio to puts. The largest trade was 10,000 May 52.5/55 call spreads purchased (200,000 contracts)."

The call spread was purchased 10,000x (ish) for $0.55. Let's look to the Options Tab, today.

That call spread is now worth ~ $0.70. The direction was right, the strikes look like maybe they were one step too high. The 50/52.5 call spread has increased more than 100%.  This one might be worth putting on a list -- see if any large one-sided order flow comes around in the next earnings cycle.

One final phenomenon -- check out the skew today:

It looks like the 57.5 strike has a small vol diff that's remained open between the front two months... Hmmm...

This is trade analysis, not a recommendation.

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