Monday, July 14, 2014

7-14-14: End of Day Report - Largest Stock Moves, New 52 Wk. Highs/Lows, Unusual Option Volume

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Chart of the Day

Provided by Charles Schwab optionsXpress

Good 'ole' Alcoa hit a new annual high today and is up 97.18% in the last year.  Boring Aluminum company?

Top Headlines
Obama finally has some good economic news to deliver

World’s Richest Lose $33 Billion as Slim Plans Breakup

Citi to pay $7 billion in mortgage settlement — but it may have gotten off easy

Top option Story
Kandi Technologies (KNDI) - How the Stock Moved Wildly & We Knew it Two-Months Ago

Open Interest
Daily Open Interest Report

Covered Call
Daily Covered Call Report

Biotech Index
Daily Biotech Small & Micro Cap Update

Market Overview

Largest Stock Gainers

Largest Stock Losers

New 52 Wk Highs in S&P 500

New 52 Wk Lows in S&P 500
No New Lows

Unusual Option Volume

Elevated Implied Volatility (IV) to Historical Volatility (HV)

This is trade analysis, not a recommendation.

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  1. Hi Ophir,
    Thanks for sharing your knowledge with us all,
    After reading options pricing and volatility (thanks for recommending it btw) I found the straddle strategy amazing you can play both side all you need is the stock to move, what puzzled me is what can I learn from the straddle value: let say I have a stock XYZ that trade at 10$ and let say a 30 days from today straddle at 10$ have a value of 2$ (call (10$) = 1$, and put (10$) = 1$ same expiration date for both), what does it tell me this 2$?
    Will the market think that 8$ and 12$ are good place to be support and resistance or maybe it is 9$ and 11$? Do I need compare it with the implied volatility of the options and have any relation that comes immediately? Is it even correct to sum them up and think this value have any significant? What other things that the 2$ value may means?
    Once again thank you for your time
    Eldad Nahmany.

  2. The at-the-money (ATM) straddle value reflects the option markets pricing of a one standard deviation move in stock price. Although we generally use the log-normal probability distribution, in the short-term, the normal distribution is a reasonable estimate. So, the ATM straddle range (in your example [$8, $12]) is an estimate that reads there is ~70% (68.26%) chance that the stock stays in that range per the option market.