EXXI is trading $24.10, up 4.6% with IV30⢠also up 3.1%. The <a href="http://www.livevol.com/">LIVEVOL⢠Pro Summary</a> is <a href="http://livevol.blogspot.com/2010/11/exxi.html">in the article</a>. <img src="http://www.livevolpro.com/help/images/blog/exxi_summary.gif" /> ------------------------------------------------------------------- <a href="http://www.livevolpro.com/help/free_trial.html"><img height="200" src="http://www.livevolpro.com/help/images/blog/lvp_trial_ad.gif" /></a> For a limited time we are offering a FREE real-time trial to Livevol Pro⢠for non-professional traders. You can get your trial by following the directions here: <b><a href="http://www.livevolpro.com/help/free_trial.html">Click for Free Trial Offer</a></b> ------------------------------------------------------------------- I posted a blog on this stock on 10-20-2010 based on it's elevated vol. You can read that post here: <b><a href="http://livevol.blogspot.com/2010/10/exxi.html">Energy XXI (EXXI) - Elevated Vol Starts to Drop</a></b> The trades we analyzed surrounded selling strangles. All of them have ended lookin' pretty sweet and today this stock showed up again on the same elevated vol scan. <b>Custom Scan Details</b> Stock Price >= $7 and <= $70 IV30⢠- HV20⢠>= 10 HV180⢠- IV30⢠<= -8 Average Option Volume >= 1,200 Industry != Bio-tech Days After Earnings >=10 and <=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. Alternatively, I've included this scan in the "Trading Opportunities" folder. You can see that result <a href="http://livevol.blogspot.com/2010/11/exxi.html">in the article</a>. <img src="http://www.livevolpro.com/help/images/blog/exxi_scan.gif" width="600" /> The EXXI Charts Tab is included (<a href="http://livevol.blogspot.com/2010/11/exxi.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). <img src="http://www.livevolpro.com/help/images/blog/exxi_charts.gif" width="600" /> We can see: IV30â¢: 68.40 HV20â¢: 40.32 HV180â¢: 51.45 So, IV30⢠is again elevated relative to the short term and long term realized movement of the stock. Let's look to the Options Tab (<a href="http://livevol.blogspot.com/2010/11/exxi.html">in the article</a>). <b>Possible Trades to Analyze</b> 1. For naked vol sellers, selling the Dec 22.5/25 or 22.5/27.5 strangles trades ~68 vol. The Dec 22.5/25 strangle @ $2.50 requires EXXI be in the range ($20, $27.5) if held to Dec expo. to be profitable. The Dec 22.5/27.5 strangle @ $1.80 requires EXXI to be in the range ($20.70 ,$29.30). So the trade off between these two is more upside room but collecting less premium and losing a touch of downside room for the 22.5/27.5 strangle. Both are naked short options. 2. Sell the Dec 22.5/27.5 strangle @ $1.80 but purchase the Dec 20/30 strangle for $0.85 for protection. This receives $0.95 (MaxGain) and locks in a MaxLoss of $1.55. The PnL Chart on Dec expo. for this trade is included <a href="http://livevol.blogspot.com/2010/11/exxi.html">in the article</a>. 3. Sell the Dec 22.5/25 strangle @ $2.50 and purchase the Dec 20/27.5 strangle for $1.25 for protection. This yields a 1:1 MaxGain:Max loss rather than the 0.61 for trade #2, but leaves less upside room. The PnL chart for this trade is also included <a href="http://livevol.blogspot.com/2010/11/exxi.html">in the article</a>. Another little bonus here, this would be selling Dec vol and Dec is a month which can sort of drift off into nothingness as holidays approach... Or not... This is trade analysis, not a recommendation. <b>Follow Live Trades and Order Flow on Twitter: @Livevol_Pro</b> Details, trades, prices, vols, skews, charts here: <a href="http://livevol.blogspot.com/2010/11/exxi.html">http://livevol.blogspot.com/2010/11/exxi.html</a> Legal Stuff: <a href="http://www.livevolpro.com/help/disclaimer_legal.html">http://www.livevolpro.com/help/disclaimer_legal.html</a>