EBIX is trading $24.20, up 0.8% with IV30⢠up 1.3%. <img src="http://1.bp.blogspot.com/_hMry1m7UF10/TKNWQ5JEGRI/AAAAAAAAFBs/1L1aF82LRwQ/s1600/ebix_summary.gif"> I found this stock using another real-time custom scan. This one hunts for high vols. <b>Custom Scan Details</b> Stock Price >= 5 IV30⢠- HV20⢠>= 10 HV180⢠- IV30⢠<= -8 Average Option Volume >= 1,200 Industry != Bio-tech Days After Earnings >=10 <=60 The goal with this scan is to identify short-term implied vol (IV30â¢) that is elevated both to the recent stock movement (HV20â¢) and the long term trend in stock movement (HV180â¢). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume), want to avoid bio-techs (and their crazy vol) and make sure I'm not selling elevated IV30⢠simply because earnings are approaching. The EBIX Charts Tab is included (<a href="http://livevol.blogspot.com/2010/09/ebix.html">in the article</a>). The top portion is the stock price, the bottom is the vol (IV30⢠- red vs HV20⢠- blue vs HV180⢠- pink). The yellow shaded area at the very bottom is the IV30⢠vs. the HV20⢠vol difference. <img src= "http://1.bp.blogspot.com/_hMry1m7UF10/TKNWPhGjCXI/AAAAAAAAFBk/4t0mYoiPveg/s1600/ebix_charts.gif" width ="500"> We can see IV30⢠is ~57 vs HV20⢠of 41. Also, the long term trend of realized vol, HV180â¢, is just 42, so vol is elevated. You can actually find a bunch of stocks with short term implied that's elevated relative to short term realized as the market has been in a steady upswing and we're going into Oct, which can be "jittery" to say the least. I like EBIX in particular because the long term HV (HV180â¢) is also quite low. Finally, let's look to the Options Tab (<a href="http://livevol.blogspot.com/2010/09/ebix.html">in the article</a>). We can see that the Oct 24 straddle is priced at about 55 vol or a $2.20 sale. The Nov 24 straddle is at 56 vol (or $4.10 to purchase) but earnings are probably in the Nov options cycle. This is interesting as earnings area volatility event and present a nice little cover to a possible sale. <b>Possible Trades to Analyze</b> 1) The riskiest trade would be a naked straddle sale in Oct @ $2.20. In this new found world of takeovers, I think a touch more prudence may be appropriate. 2) With the above in mind, selling the Oct straddle at $2.20 and buying 2 Oct 27 calls for $0.50 total, or a $1.70 net credit, may be a bit safer. Note this still has naked downside risk. 3) Noting that earnings are in the Nov cycle, another trade seems reasonable. A sale of the Oct 24 straddle and a purchase of the Nov 24 straddle yields a $1.90 debit. Last earnings cycle the IV30⢠reached as high as 64.69, so a 56 vol purchase in Nov might actually be a winner using the Oct straddle sale to fund the time decay. The hope here would be that EBIX sticks close to $24 on Oct expo, then the Nov 24 straddle (long) should be worth well over the $1.90 debit. A sale of that straddle right before earnings on elevated vol is one approach to exiting the strategy. Keep in mind, this trade loses to a takeover unlike #2, as it's long vega through the calendar spread. Unlike #1 though, it has a capped max loss of $1.90. This is trade analysis, not a recommendation. Details, trades, prices, vols, charts here: http://livevol.blogspot.com/2010/09/ebix.html Legal Stuff: <a href="http://www.livevolpro.com/help/disclaimer_legal.html">http://www.livevolpro.com/help/disclaimer_legal.html</a>