FSIN - March Calls Trade Huge... Again

Discussion in 'Options' started by livevol_ophir, Sep 22, 2010.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    FSIN closed yesterday at $8.25.

    <img src="http://1.bp.blogspot.com/_hMry1m7UF10/TJoUFqzyRuI/AAAAAAAAE6M/PH-4KtSZq8I/s1600/fsin_summary.gif">

    This company has popped up on my unusual trading volume scan for some time, today I felt like it was worth a note. FSIN is a producer of bimetallic wire products, principally copper-clad aluminum (CCA) and copper-clad steel (CCS) products.

    The company traded over 9,700 options yesterday on total daily average option volume of just 691. All but 320 contracts were calls yielding a 29:1 call : put ratio. The action was in the Mar'11 10 calls, where 9,044 traded. The Stats Tab and Day's biggest trades snapshots are included (<a href="http://livevol.blogspot.com/2010/09/fsin.html">in the article</a>).

    The Options Tab (<a href="http://livevol.blogspot.com/2010/09/fsin.html">in the article</a>) illustrates that the call OI is huge. The OI has risen today by another 8,500 (ish), so the calls were opening purchases again.

    The largest OI I see in FSIN other than the Mar'11 10 calls is 635 while the calls are now over 38,000. This is the flow that caught my attention.

    On 9-20-2010 a 19,900 lot went up on the offer for $0.65 on a $0.35 x $0.65 market. The Time & Sales Tab for that day and trade is included (<a href="http://livevol.blogspot.com/2010/09/fsin.html">in the article</a>).

    Finally, the Charts Tab (6 months) is below (<a href="http://livevol.blogspot.com/2010/09/fsin.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.

    What's interesting here is the HV20™. As the OI in the March'11 10 calls is increasing to almost absurd levels relative to the "normal" levels for this stock, the stock has just stopped moving. So we can see what I highlighted in the chart, the IV30™ rising as the short term realized is falling off a cliff. This is actually very similar to what happens in a bio-tech with FDA news pending. Stock is frozen, vol explodes (I know FSIN vol isn't exploding, just sayin; it's similar).

    Oddly enough, the skew hasn't change shape....

    This is trade analysis, not a recommendation.

    Details, trades, prices, vols, charts here: