Friday, July 1, 2011

American Tower (AMT) - Call Buyers

AMT is trading $53.30, up 1.9% with IV30™ up 7.9%. The LIVEVOL® Pro Summary is below.


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American Tower Corporation is a holding company. It is a wireless and broadcast communications infrastructure company that owns, operates and develops communications sites.

The company has traded over 11,000 contracts on total daily average option volume of just 3,321. Calls have traded on a 36:1 ratio to puts. The action is in the Jul and Aug 52.5 calls where combined over 9,000 have traded -- substantially purchases on both lines. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the calls in Aug are opening (compare OI to trade size). While Jul is ambiguous, I believe the Jul existing OI is long.  The stock volume thus far is just ~1.3 million on daily average of 3.3 million, so these feel like naked call purchases.

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

What's odd is that the skew doesn't really show a change in shape. I would have expected the 52.5 line to bump up on the order flow -- at least in Jul.

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).

The implied is still below the HV20 though it has now popped over the HV180.

Possible Trades to Analyze
This is strictly order flow given that the skew is "normal" and the vol is "fair." If you're a believer in the flow, then perhaps owning deltas is the right move. If you're a seller of order flow, then perhaps offering the calls gets some edge.

This is trade analysis, not a recommendation.

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