Wednesday, November 13, 2013

Crocs (CROX) - Stock Pops Volatility Explodes on News that Company Looks to Go Private

CROX is trading $13.82, up 9.3% with IV30™ exploding up 36.3%. The Symbol Summary is included below.

Provided by Livevol

Crocs, Inc is a designer, manufacturer and distributor of footwear and accessories for men, women and children. As of December 31, 2012, the Company 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.

This is a vol and stock note on the day.  CROX spiked mid-day both in price and volatility, it seems to have stemmed from a note that CROX is considering going private.  I have included the tick chart below -- the top portion is the stock price, the bottom is the implied volatility for the Nov options.

Provided by Livevol

We can see how the price spiked and the Nov (three day options) volatility went from ~34% to ~ 134% in one minute. Whoa...

I found this stock using a real-time custom scan. This one hunts for vol gainers on the day.

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

Let's turn to the two-year CROX Charts Tab. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

It's the stock side that has the most information, namely it's been going down.  Check out the gaps in those three earnings releases I have highlighted (the blue "E" icon represents the earnings date).  Before today, the stock was trading near multi-year lows.  So what?.  Well, the market seems to reflect that if the stock does go private, the buyout price for shareholders will be a premium to that low price.

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

Provided by Livevol

Across the top we can see the monthly vols are priced to 60.21% for Nov (up 24.9 vol points) and 41.63% for Dec (up 10.9 vol points).  While the stock is up, it's tempered -- off of the highs of the day.  This will be an interesting one to watch as these news snippets (even if they prove to be true in outcome) discuss events that a long time to finalize (see DELL).  So, "should" the volatility be elevated in the near-term... I guess we'll see...

This is trade analysis, not a recommendation.

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