Monday, December 5, 2011

Titanium Metals (TIE) - OTM Calls Trade to Company Going Private Rumors

TIE is trading $16.40, up 8.0% with IV30™ up 10.9%. The LIVEVOL® Pro Summary is below.


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Titanium Metals Corporation (TIMET) is a producer of titanium melted and mill products. The Company has titanium production facilities in both the United States and Europe.

This is an order flow note with some cool skew and overall vol comps. Let's start with order flow and news:

Titanium Metals spikes on volume, hearing strength attributed to speculation that the co could be taken private
Source: Provided by (

The company has traded just under 19,000 contracts on total daily average option volume of just 2,958. Calls have traded on a 42.8:1 ratio to puts with the action in the front 16 and 17 calls. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the calls on the 17 line are mostly opening (compare OI to trade size).

The Dec 16 calls are more ambiguous. On 11-16-2011 the Dec 16 calls traded 6,461x -- pushing that OI. I've included the Time & Sales Tab snapshot -- filtering for trades equal to or larger than 500 contracts.

We can see that the trades went off on the offer of a $0.10 wide market. Those were purchases and the trades today are long again. That OI should spike to over 10,000 by tomorrow.

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

The front month shows a nifty "V" like skew -- reflecting risk both to the downside and the upside. The back month is flattish, revealing an interesting vol diff between the front two months to both the upside and downside OTM options.

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 made a pretty nice move up over the last few trading days, rising from $14.10 on 11-23-2011 to $16.40 today, or a 16% rise. On the vol side, we can see the IV30™ is now elevated to both of the historical measures. Specifically:

IV30™: 53.39
HV20: 44.36
HV180: 44.44

This is trade analysis, not a recommendation.

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