MON is trading $59.73, up 1.3% with IV30⢠up 13.9% The <a href="http://www.livevol.com/">LIVEVOL⢠Pro Summary</a> is <a href="http://livevol.blogspot.com/2010/10/mon.html">in the article</a>. <img src="http://www.livevolpro.com/help/images/blog/mon_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 found this stock using a real-time custom scan. This one hunts for high vols. <b>Custom Scan Details</b> Stock Price >= $7 <= $70 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 MON Charts Tab is included (<a href="http://livevol.blogspot.com/2010/10/mon.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/mon_charts.gif" width="600" /> We can see: IV30â¢: 59.73 HV20â¢: 29.91 HV180â¢: 33.0 So, IV30⢠is elevated relative to the short term and long term realized movement of the stock. Look at the stock chart, we can see that on 9-28-2010, MON gapped down nearly $5 on this news from AP: "A Jefferies analyst said the yield of the agribusiness company's genetically modified corn seed has so far been weaker than expected." This pushed the HV20⢠above 49 at one point, but now enough trading days have passed where that move has rolled out of the average. Note that HV30⢠is still 41. Today there was an apparently positive report that the global seed business looks good going out a few years, stock has rallied a bit and vol is up a lot... Tricky... When it's all said and done, MON is now higher buy ~$4 than it was the day before the gap down. Let's look to the Options Tab (<a href="http://livevol.blogspot.com/2010/10/mon.html">in the article</a>). <b>Possible Trades to Analyze</b> 1. Sell the 60 straddle @$5.00 or ~41.5 vol. Ah, selling options feels so good... I mean, you know, when it works... 2. Pick a side of that straddle to "defend." Buying the Nov 57.5 put for $1.50 still leaves a net cedit of $3.50, so there is no downside risk. It's a winner below $60 at all prices. The upside though, has risk and loses naked above $63.50. To "defend" the upside, it's a bit more tricky. Only a 67.5 call exists. Fair value at 41 vol is ~ $0.40, maybe a $0.50 bid gets hit. That would leave a $4.50 credit, so the trade does lose above $64.50, but stops out at $67.5. The downside in this case would be naked. 3. Do a Nov 55/57.5 1x2 put spread and receive ~$0.02 to cover commissions. This is naked downside below $55, but maybe that's ok?... If MON decides to fall back down below $57.5 (but above $55), this can be a fancy little winner for a credit to enter the position (excluding margin). 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/2010/10/mon.html">http://livevol.blogspot.com/2010/10/mon.html</a> Legal Stuff: <a href="http://www.livevolpro.com/help/disclaimer_legal.html">http://www.livevolpro.com/help/disclaimer_legal.html</a>