FB Vol Is Going to Go Up

A sleeping Giant has been awoken by Mobile Advertising.  FB now appears like it is going to let all of those IPO buyers out of the stock and maybe more.  I think selling at 38 though would be a huge mistake, because the stock appears to want to keep moving and IV appears to be heading higher in the near term.   For starters IV is rallying with the stock.  


LivevolX (R)

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AAPL Straddle is Cheap

Typically ahead of earnings, whether there are weekly options or not, Options on AAPL will catch a big bid.  Prior to earnings, I expect to see IV in Livevol somewhere north of 40 into an earnings cycle.  This is not happening in AAPL options right now.  Despite earnings being next week, 30 day IV is below 30%.


Livevol (r)

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ZNGA lives!

I want to characterize today with movement.  AAPL trades from 441 to 422, GOOG trades from 894 to 916 and PCLN from 789 to 808.  Stocks are moving again and I alluded to that yesterday that the realized volatility for names is starting to pick up.  VIX managed up .04 but really the story is that stocks are moving and the reason is money is coming back into the market.

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BAC IV Probably Too Cheap

IN the last few days, since Bank of America took a dive on its earnings, the stock has found some real strength.  BAC is now just a few cents from its 52 week high and threatening a 2 year high.  The move has not been a slow grinding move like we see sometimes out of banks.  It’s been a nice quick move.

This is why I am so confused by where BAC IV is trading.  Take a look at this stock chart, IV graph (the red line) and 20 day HV chart (the blue line).

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The Sissification of Risk

Yes I made that word up.  I make them up all the time during the Pit Report.  I was looking for a phrase to describe the activity, and it was hard to put things into words.  Essentially market participants want return without taking risk, and then complain when they lose.

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Kersplat goes the implied volatility in FB now what to do?

We have spent a lot of time in this blog chronicling the movement in Facebook.  I think the stock has been a really good trader except of course for the $38 buyers on the IPO.  It feels like nobody wanted the stock at $19 either because all the initial investors were getting out.  Some did for sure as was reported today but by and large there is a big group of holders not quite ready to hit the bricks yet.  The lockup expiration dates have been the great buying opportunities of the year for this name.  I guess the point is that when things are telegraphed t

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AAPL Earnings Straddle is Really Juicy

We all know that AAPL has had a rough couple of months.  The stock has moved up and down 200.00 in the last 6 months.  The company has earnings next week and I wanted to put into perspective how much the fear is priced into options right now.  Take a look at this chart of AAPL stock and IV.


Livevol (r)

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Understand Fiscal Cliff Straddle Risk in SPX

It's been interesting to watch this fiscal cliff debacle develop.  A week ago, I had the market pricing in a 92% chance of a deal getting done.  Yesterday morning, the market was pricing at about an 80% chance of a deal getting done.  Today, that number remains close to 80, although slightly below that now, near 75%.  In fact, we can clearly see in this list of SPX weekly option vols what is driving up the VIX:


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Facebook Volatility is Still Cheap

I had to blink recently, because I thought FB was just a $20 stock.  Nothing makes momentum traders happier than an upgrade of a whole bunch of technology stocks at once.  FB, AAPL and YHOO all got the nod today from influential analysts and banks.  We have had a small short put spread position in YHOO in our Strategy Letter for a while now, so I agree with the bullishness.  One thing about the rally in FB is that it was accompanied by a rise in volatility.  That I think is interesting.

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