Wednesday, January 30, 2013

Facebook (FB) - Should Vol be This Low With Earnings Due in 68 Minutes?


FB is trading $31.20, up 1.3% with IV30™ up 0.5%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Facebook, Inc. (Facebook) is engaged in building products to create utility for users, developers, and advertisers.

This is a quick vol note, FB releasing earnings AMC today. The interesting point here is how low the implied is relative to the last earnings reports after a rather abrupt stock price appreciation.

Let's start with the Charts Tab below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side we can see the dramatic stock price recovery for FB after the steep fall from IPO. The stock is up ~70% from its lows.

On the vol side we can see the three last earnings releases (highlighted in yellow) and how the vol has been dipping for each one. It's easier to see this phenomenon in a vol chart alone, which I have included below.



It's much easier to see here how the implied has dipped for each of the earnings releases. As of right now, the IV30™ is actually in the 49th percentile (all-time) for FB -- so it is below the 50th percentile and earnings are due out in an hour. Quite compelling.

Finally, let's turn to the Options Tab.



Since FB has weekly options, we can see through the ATM strike ($31), that the options reflect a ~$3.00 move off of the earnings report, or about 10%. Take a look at the stock chart above and see the moves made off of the last two earnings cycles, take into account the run up in stock and then ask yourself, "Should FB implied be lower than the 50th (or 80th) percentile with earnings due out in 68 minutes?" A fair question indeed...

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Tuesday, January 29, 2013

Fortinet (FTNT) - Vol Reaches Annual High with Earnings Due out Tomorrow; Puts Too Juicy?


FTNT is trading $19.48, down 7.5% with IV30™ up 8.1%%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Fortinet, Inc. (Fortinet) provides network security solutions. Through the Company’s products and subscription services, Fortinet provides integrated and protection against security threats for enterprises, service providers and governmental entities worldwide.

This is a quick vol note on a stock that has earnings due out tomorrow BMO. It's not so much that the vol is elevated, as that is expected, but it's how elevated the vol is relative to the last three earnings cycles along with the stock decline today and the stock gap down last cycle.

Let's start with the one-year Charts Tab 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 has had a quite a bumpy ride, most notably after the last earnings report in mid Oct of 2012 when the stock dropped from $24.80 to $20.14 in day. Obviously the IV30™ is elevating into the earnings news, but let's take a closer look by isolating the IV30™ in a one year chart, below.



The blue "E" icons represent the past earnings dates. It's easier to see in this chart that the implied is now at an annual high, above any vol level prior to earnings in the last year. My best guess is that there is some hyper sensitivity based on the last earnings report and that stock slide we see today is circumstantial evidence of that belief.

Finally, let's turn to the Options Tab, below.



Across the top we can see Feb vol is priced to over 90% and Mar to 62.8% -- of course that's merely a reflection of earnings due out tomorrow. It will be an interesting stock reaction to monitor tomorrow -- this may be a case where elevated vol and dipping stock has made the OTM puts far too juicy even for an earnings event based on the fear from the last one. Or the stock can gap down 70% tomorrow -- ya know, either one.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Monday, January 28, 2013

Research in Motion (RIMM) - Staying or Leaving… Forever? Let’s Ask Again on Wednesday. Vol at Multi-Year Highs

RIMM is trading $16.17, down 7.8% with IV30™ up 6.1%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------


I found this stock using a real-time custom scan. This one hunts for elevated vols. I do note that the IV30™ for RIMM is in the 100th percentile, indicating an annual high. In fact, the implied is at multi-year year highs.

There is news due out on RIMM’s much anticipated version 10 – the “make or break” model, and that news is coming on Wednesday of this week.

Custom Scan Details
Stock Price GTE $5
IV30™ GTE 30
IV30™ Percentile GTE 80
Average Option Volume GTE 1,200

The goal with this scan is to identify short-term implied vol (IV30™) that is elevated to its own annual history (at least in the 80th percentile). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume), and I want a minimum vol level so I don't pick up any boring ETF’s (or whatever). The stock price requirement helps me identify names that have enough strike prices to trade or spread.

Let’s start with the two-year RIMM Charts Tab below. The top portion is the stock price the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side, we can see the stock drop from ~$70 two-years ago to as low as the $5 range, and now back to ~$16. I’ve written extensively on RIMM, with the main theme being quite simple: “The potential that the firm was on the verge of Obsolescence.” There’s no doubt that iPhone crushed Blackberry, then Android and Samsung double and tripled down. RIMM was almost a $150 stock back in 2008.

On the vol side we can see that the IV30™ is in fact at multi-year highs. That does make sense, and the implied way well rise into Wednesday, potentially making consecutive multi-year highs in vol.

There is a shorter-term story. I have included the same chart but just a six-month period, below



In this chart we can see the impressive recovery in stock price. This stock was very much on the verge of becoming a penny stock (regardless of the revenue numbers) and has ripped back to relevancy on the promise of Blackberry 10.

Let’s quickly turn to the Skew Tab.



Here we can see that “the event” seems to be coming out this week (note the red line are the Feb 1 weekly options).

Finally, let's look to the Options Tab (below).



Across the top we can see the vol in the Feb01(W) options – priced to over 132%, then a monotonic drop of as we move forward in expiries. While there has been some speculation that the “leaks” of information from RIMM which have moved the stock higher have lessened the impact of the actual news due out his week, the option market would disagree. Let’s keep our eyes on this on – is RIMM staying or leaving?

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Friday, January 25, 2013

CROCS (CROX) - Vol Hits Multi-Year Lows with Earnings Approaching


CROX is trading $14.91, up 2.2% with IV30™ down 7.4%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Crocs, Inc is a designer, manufacturer and distributor of footwear and accessories for men, women and children. As of December 31, 2011, it sold its products in more than 90 countries through domestic and international retailers and distributors and directly to end-user consumers through its company-operated retail stores, outlets, kiosks and Webstores.

I found this stock using a real-time custom scan. This one hunts for depressed vols, and CROX has in fact hit a multi-year low in IV30™ with earnings due out in the Mar expiry.

Custom Scan Details
Stock Price GTE $5
IV30™ GTE 20
IV30™ Percentile LTE 10
Average Option Volume GTE 1,200

The goal with this scan is to identify short-term implied vol (IV30™) that is depressed to its own annual history (at most in the 10th percentile). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume), and I want a minimum vol level so I don't pick up any boring ETF’s (or whatever). The stock price requirement helps me identify names that have enough strike prices to trade or spread.

The six-month CROX Charts Tab is included (below). The top portion is the stock price the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side we can see a number of gaps, certainly a huge one off of earnings in Oct of 2012, but even  more recently the stock has made some abrupt one-day moves.

But this is a vol note, so I have included the two-year IV30™ chart in isolation, below.



We can see pretty clearly that the level of the implied is not only at an annual low, but a multi-year low. An interesting phenomenon when coupled with the fact that earnings are due out in Mar expiry. Hmm...

Finally, let's look to the Options Tab (below).



Across the top we can see that mar vol is well elevated to Feb (42.50% to 29.52%),but still, that 42.50% feels pretty low. Certainly, the IV30™ will rise as we approach earnings as will Mar vol, the question is to what level. This is a good one to put in a watchlist and check every so often as we get through Feb expiry and approach earnings.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Thursday, January 24, 2013

Green Mountain Coffee Roasters (GMCR) - Vol Malaise Depresses Earnings Vol in Gapping Stock


GMCR is trading $43.72, up 6.4% with IV30™ up 9.0%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Green Mountain Coffee Roasters, Inc. (GMCR) is engaged in the specialty coffee and coffee maker businesses.

I found this stock using a real-time custom scan. This one hunts for vol gainers on the day. But the reality is, this is a depressed vol note, not in general, but in specific to the earnings release due out in early Feb. I've included the details of the scan below.

Custom Scan Details
Stock Price GTE $5
IV30™ GTE 30
IV30™ Percent Change GTE 10
Average Option Volume GTE 1,200
IV30™ Change GTE 7

The goal with this scan is to identify names with rising IV30™ that also have a reasonable amount of liquidity in the options (thus the minimum average option volume) and enough strikes to spread and thus a minimum stock price. I also require a minimum vol level in order to avoid any boring ETFs (or whatever).

The two-year GMCR Charts Tab is included (below). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side I have highlighted in yellow most of the gaps the stock has experienced over the last two years -- and there are a lot of them. The catalyst to many of the big moves has been earnings. I bring this up b/c the next earnings report for GMCR is due out 2-6-2012 AMC.

In order to get a better view of the implied I have included the two-year IV30™ chart in isolation, below.



We can see the implied rising of late, then a small dip and then again, the pop today. More importantly, we can see that the IV30™ is right about in the middle of its annual range. In fact, it is in the 46th percentile (annual).

This is part of a larger phenomenon I am noticing -- while VIX is at multi-year lows (and thus individual stocks are at multi-year vol lows), when earnings are approaching, many stocks are not reacting "normally." What I mean is, an earnings event is a firm specific event, and in most cases, the implied should be near annual highs (say 80th percentile or higher), yet I am finding a bunch of names where the earnings vol has found the same malaise as the overall vol. But are stocks moving on earnings news? See AAPL and NFLX for an answer to that question.

Finally, let's look to the Options Tab (below).



Across the top we can see that Feb vol is priced to 96.36% and Mar vol is priced to 69.89%. First, the vol diff is huge between the two. Of course, there should be some elevated vol in Feb to Mar, but, yikes... Earnings are still two calendar weeks away which means that vol diff should expand quite considerably as we approach that Feb 6th date.  Second, 96% vol in this stock is kinda middle of the road...

Anyway, although the vol is high in absolute terms (this is a 100% vol stock), the malaise into earnings feels... odd?...

This is trade analysis, not a recommendation.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Wednesday, January 23, 2013

AAPL - "Just the Facts Ma'am" -- Well, that Supports the Opinion: "Everything has Changed. The Old AAPL is No More."


AAPL is trading $509.81, up 1.0% with IV30™ up 0.4%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------
LIVEVOL EXECUTION -- COMPLEX TRADING SIMPLIFIED


-----------------------------------------------------------

Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications.

For those that don't know, AAPL is releasing earinngs today AMC.

I last wrote about AAPL on 12-10-2012. You can read that rather controversial post here:

AAPL - Everything has Changed. The Old AAPL is No More. The New AAPL is a Riskier Entity and the Market Doesn't Know What that Means Yet.

For the record, I have included the Symbol Summary from that article below for reference to the one above (from today).



We can see AAPL is ~$20 lower and the vol is ~8% higher. While I'll share my opinion on AAPL at the end, for now, it's "just the facts ma'am," and the facts are compelling enough.

Let's start with the six-month Charts Tab below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side we can see that AAPL is trading near a six-month low if not for a small recent rally into the earnings announcement today.

On the vol side we can see that the implied has been rising into the event, but in sort of empirical yet circumstantial evidence of my prior hypothesis that AAPL is in fact a totally different entity than it was a year ago (or whatever), we can see the implied is trading higher than the last eight earnings announcements. Note the blue "E" icon on the stock chart indicating earnings.

Last eight earnings announcements (IV30™):
Today: 42.27%
12-25-2012: 36.79%
7-24-212: 34.99%
4-24-2012: 40.43%
1-24-2012: 32.35%
10-18-2011: 37.58%
7-18-2011: 32.06%
4-20-2011: 27.51%

So, in English, the options are reflecting greater risk now into this earnings announcement than in the prior two years (eight earnings reports). Again, circumstantial evidence of my hypothesis.

I could show you the Skew Tab, but you already know what it looks like. Crazy vol in the weekly options expiring on Friday, and a monotonic decrease as we go further out in the option expiries. OK, you twisted my arm (or I twisted my own arm?), here's the Skew Tab:



Bottom, line the facts are this:
1. AAPL is near six-month lows

2. The IV30™ for this earnings release is higher than it has been for the prior eight releases.

And now for opinion... In the words of Austin Powers, "Allow myself to introduce myself." In my opinion, AAPL is a completely different entity than it was prior to Mr. Jobs' passing. I think AAPL is MSFT -- not yet, but soon... A company with disruptive technology unafraid to use less than the most ethical approaches to dominate markets, but this is America, and there are competitors, and eventually, someone else has the boy (or girl) genius with the next big ideas. Gates is done breaking the barriers of new ideas and technology. Jobs is too (absolutely all due respect). Remember when MSFT had a market cap of $600 billion?

The option market is reflecting greater risk into this earnings release than all the ones before (All = last eight quarters) b/c people are staring to catch on. There's more uncertainty, it's scientifically observable (i.e. a phenomenon). There's no telling what happens on this earnings release, the stock could rally hard, but IMHO, eventually we will all see:

"Everything has Changed. The Old AAPL is No More. The New AAPL is a Riskier Entity and the Market Doesn't Know What that Means Yet."

The vol numbers reflect that possibility.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Tuesday, January 22, 2013

Research in Motion (RIMM) - Stock Continues to Rise with Vol; New Version Means New Life or Flat-line Death?


RIMM is trading $17.62, up 11.2% with IV30™ up 5.9%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market.

I think by now, we all know the RIMM story. Once the highest of highs as the premiere cell phone provider and a stock price in $145 range, to going nearly bankrupt and a stock price nearing $5. It seems though, that the promise of RIMM 10 is more than just promise, but reality. This company may have actually gone from borderline irrelevancy and potential insolvency to very relevant, and primed to rake in some free cash flow. But, lest we forget, if RIMM version 10 is a bust, this might not be a $6 stock, it might just be a memory.

Let's start with the two-year chart, which is actually bad, and then zoom in on he last six-months (which is good).



On the stock side we can see those highs above $70, when in fact in the summer of 2008, the stock was trading above $145. fast forward to this last year, and the 52 wk low for RIMM is $6.22. That's a 96% drop in value -- "hello iPhone."

I posted some articles on RIMM truly questioning the relevance of the firm, you can one post in particular on 11-23-2011.

Research in Motion (RIMM) - New Low, Vol Popping... Is RIMM Risking Obsolescence?


But let's zoom into the six-month chart for RIMM, below.



We can see the six-month return has seen the stock rise from $6.86 to now over $17.50. It's all in the way you look at things, I guess. As of right now, RIMM's CEO (Thorsten Heins) is garnering praise for his leadership in just a year of his "CEO-ship."

On the vol side we can see the IV30™ has been rising with the stock price and is in fact now in the 84th percentile (annual). So, in a world with VIX at multi-year lows and vol of VIX at multi-year lows, we see a stock rising and vol ripping alongside. In this case, it makes perfect sense. Lest we forget, if RIMM version 10 is a bust, this might not be a $6 stock, it might be a memory.

Finally, let's turn to the Options Tab.



Across the top we can see the monthly vols are priced to 90.315 for Feb and 84.895 for Mar. The next earnings release for RIMM should be after Mar expiry. I'll repeat myself fom a few lines above and the intro: "Lest we forget, if RIMM version 10 is a bust, this might not be a $6 stock, it might be a memory."

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Friday, January 18, 2013

VIX at Multi-year Lows; Probability of Stability at These Lows at Multi-year Highs.


The VIX spot is quoting $12.69, down 6.48% with IV30™ down 2.0%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

The VIX measures the implied volatility of the S&P 500 and is often referred to as the “Fear Index.” I found VIX using the real-time custom scan that hunts for depressed vols. But there’s more to this story… A lot more…

I’ll start this off with my concluding question:

“Does the S&P 500 have less risk now than it has at any point in the last two-years and even if so, is the probability of that low risk maintaining its current level higher than it has been at any point in the last two years?”

Custom Scan Details
Stock Price GTE $5
IV30™ GTE 20
IV30™ Percentile LTE 10
Average Option Volume GTE 1,200

The VIX two-year Charts Tab is included (below). The top portion is the spot price the bottom is the vol (IV30™).



We can see that the spot is now trading at a multi-year low. Through all the fiscal cliff, political battles, Eurozone “whatever”, Chinese fraud epidemic and everything else, the S&P 500 volatility index is at a multi-year low. But there’s more…

I have included a two-year chart of the VIX IV30™ - the vol of the vol (the fear of the fear), below.



We can see that not only is the VIX spot itself at multi-year lows, but the IV30™ is also at a multi-year low. In other words, the “fear index” is at a low and the “fear that the fear” could change from here is also at a low.

Believe it or not, there’s more to this story… Let’s turn to the Skew Tab.



We can see that the monthly vols monotonically decrease from the font to the back. In English, the option market reflects that the perceived fear of the fear index moving is lessening with time. That is, the multi-year lows will continue to be breached and trend lower.

Finally, let's look to the Options Tab (below).



Across the top we can see the monthly vols for the VIX are priced to 70.80%, 66.65% and 55.86% for Mar, Apr and Jun, respectively. Just take a moment to reflect on that Jun vol… The 52 wk range in IV30™ of the VIX is [67.57%, 114.89%], so again, a new low today. But 55.86% (Jun vol) is substantially lower than even these multi-year lows.

The bottom line is, without expressing opinion, the facts of the option market reflect that the VIX itself is at multi- year lows and the probability that the VIX moves away fromthese levels is at its lowest level in multiple years. Taken a step further, the forward looking option market reflects that the risk of a change in VIX is even lower.

It’s not my place to question the “market” but ask yourself this: “Does the S&P 500 have less risk now than it has at any point in the last two-years and even if so, is the probability of that low risk maintaining its current level higher than it has been at any point in the last two years?”

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Thursday, January 17, 2013

Barnes & Noble (BKS) - New Annual Low in Vol as Stock Drops


BKS is trading $13.28, up 0.6% with IV30™ down 2.4%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Barnes & Noble, Inc. (Barnes & Noble) is a bookseller. The Company is a content, commerce and technology company that provides customers access to books, magazines, newspapers and other content across its multi-channel distribution platform.

I found this stock using a real-time custom scan. This one hunts for depressed vols. BKS has in fact breached a new annual low today.

Custom Scan Details
Stock Price GTE $5
IV30™ GTE 20
IV30™ Percentile LTE 10
Average Option Volume GTE 1,200

I last wrote about BKS on 10-10-2012, noting the vol pop on that day. I have included the Symbol Summary from that day, below -- note the vol difference between today and the prior post.



You can read the post here:
Barnes & Noble (BKS) - Vol Pops But Remains Depressed as Nook News is Good; Solvency and New Technology but Low Risk?

Let's turn to the one-year BKS stock chart (below).



On the stock side we can see that other than the crazy spike on 4-30-2012, the stock has found a rather quiet period. More myopically, we can see the stock has dropped from $16.30 on 12-11-2012 to now in the low $13 range.

But, ultimately, this is a vol note, so I have included the one-year IV30™ chart below.



This is a fascinating chart in that the implied has continued to fall (in trend) as the stock has fallen -- rather unusual, especially given the specifics of the firm -- a "book store" that is held up because of a tablet. The 52 wk range in IV30™ before today was [48.03%, 114.31%], so the level today is in fact a new annual low and yeah, the vol can go higher.

Finally, let's look to the Options Tab (below).



Across the top we can see the monthly vols are priced to 46.78% and 50.44% for Feb and Apr, respectively. That slight elevation to Apr reflects an earnings announcement due out after Feb expiry (but inside Apr). Ultimately I question BKS vol -- an annual low right now feels weird -- again, this was a bookstore about to go bankrupt until they invented a nifty tablet. 46% vol just feels... weird...

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html

Wednesday, January 16, 2013

Constellation Brands (STZ) - Multi-Year Stock High Moves with Elevated Vol; Apr Earnings Vol Forgotten?


STZ is trading $38.62, up 6.2% with IV30™ up 11.1%. The LIVEVOL® Pro Summary is below.



-----------------------------------------------------------


Click for Free Trial

-----------------------------------------------------------

Constellation Brands, Inc. is a wine company. The Company is a marketer of imported beer in the United States. through its investment in Crown Imports, LLC (Crown Imports), a joint venture with Grupo Modelo, S.A.B. de C.V. (Modelo) pursuant to which Modelo’s Mexican beer portfolio (the Modelo Brands) are imported, marketed and sold by the joint venture in the United States.

This is a multi-level note in that the stock has breacjed a new high, the IV30™ has triggered the one-day vol gain scan, there is an interesting calendar vol diff and the overall level of the IV30™ has triggered the annual elevated vol scan.

Oddly, I can't really find any news for the stock or vol move today. Let's look at the Charts Tab (one-year) below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).



On the stock side we can see the large price appreciation over the last year, with the stock rising from $20.66 to now over $38.50. I note in particular that earnings gap up on 6-29-2012 which acted as a catalyst for the price rise. I also note that with the move today, STZ has set a new multi-year high in stock price.

In order to better examine the implied, I have included the one-year IV30™ chart in isolation, below.



We can see how the implied is spiking of late with the stock rise. The 52 wk range in IV30™ is [18.41%, 56.52%], putting the current level in the 94th percentile (annual). So, here we have an example of a stock that is rising to new highs and the vol is also rising -- a good reminder that while the rule of thumb of rising stock and falling vol is a good one, it's not always true.

Let's turn to the Skew Tab, and we'll find some more interesting phenomena with the vol.



The company just released earnings on 1-9-2013, with the next earnings release due out in Apr. However, we can see that Apr vol is priced below Feb (and Jan = 3 days). This presents an interesting opportunity where we have elevating vol in a stock hitting new multi-year highs with the catalyst to that stock break out being an earnings report -- yet the vol for the next earnings report is priced lower than the months in front. Very cool...

Finally, let's turn to the Options Tab.



Across the top we can see the monthly vols are priced to 54.49% and 47.28% for Feb and Apr, respectively. Again, if the next earnings report is in Apr, that's quite a discount to Feb and potentially to Mar in a stock where owning vega has been a winner.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html