Tuesday, December 6, 2011

Hecla Mining (HL) - Calls Trade, Vol and Stock Pop

HL is trading $6.14, up 2.7% with IV30™ up 16.3%. The LIVEVOL® Pro Summary is below.


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Hecla Mining Company is engaged in discovering, acquiring, developing, producing, and marketing silver, gold, lead and zinc.

This is a quick order flow note. HL has traded nearly 48,000 contracts on total daily average option volume of just 12,997. Calls have traded on a 61.3:1 ratio to puts with the action in the Jan 6 calls -- over 44,000 have traded. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the Jan 6 calls are mostly opening (compare OI to trade size) and look to be substantially purchases. When looking down the entire option chain for HL, I don't see any OI larger than 40,000, so the volume today is significant.

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

We can see significant upside skew in all three of the front months. Oddly, the Jan 6 vol is the lowest of any line in the front two months. It is worth noting that the Jan 6 calls are now ITM. Dec vol is up 11.2 points and Jan is up 9.8 points.

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 stock has had a bit of a bumpy ride with a long-term historical realized vol of ~56. The short-term historical realized has been above the long-term trend since the end of Sep., or in English, the stock's short-term realized vol is above the long-term trend. As of today, the implied is above both the historical realized measures.

The 52 wk range in stock price is [$4.81, $11.52] and in IV30™ the 52 wk range is [44.28%, 81.55%].

This is trade analysis, not a recommendation.

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