RDN is trading $8.61, down 3.4% with IV30â⢠up 2.3%. The <a href="http://www.livevol.com/">LIVEVOLâ⢠Pro Summary</a> is <a href="http://livevol.blogspot.com/2010/10/rdn.html">in the article</a>. <img src="http://www.livevolpro.com/help/images/blog/rdn_summary.gif" /> ------------------------------------------------------------------- <a href="http://www.livevolpro.com/help/free_trial.html"><img src="http://www.livevolpro.com/help/images/blog/lvp_trial_ad.gif" height="200" /></a> For a limited time we are offering a FREE real-time trial to Livevol Proâ⢠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 low vols. <b>Custom Scan Details</b> Stock Price >=$7 <= $70 IV60â⢠>= 1 IV60â⢠- HV60â⢠<= -8 >= -40 HV180â⢠- IV60â⢠>= 8 Average Option Volume >= 1,200 Industry != Bio-tech The snapshot of the scan is included (<a href="http://livevol.blogspot.com/2010/10/rdn.html">in the article</a>) in case you want to build it yourself in Livevol Proââ¢. <img src="http://www.livevolpro.com/help/images/blog/low_vol_60_scan.gif" width="600" /> The goal with this scan is to identify intermediate-term implied vol (IV60ââ¢) that is depressed both to the intermediate stock movement (HV60ââ¢) and the long term trend in stock movement (HV180ââ¢). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume) and want to avoid bio-techs (and their crazy vol). The RDN Charts Tab (vol only) is included (<a href="http://livevol.blogspot.com/2010/10/rdn.html">in the article</a>). IV60â⢠- yellow vs HV60â⢠- blue vs HV180â⢠- pink). We can see: IV60ââ¢: ~68.63 HV60ââ¢: 80.62 HV180ââ¢: 89 So, IV60â⢠is depressed relative to the intermediate term and long term realized movement of the stock. Finally, let's look to the Options Tab (<a href="http://livevol.blogspot.com/2010/10/rdn.html">in the article</a>). We can see that the Nov 7.5/9 strangle is priced at ~73 vol with earnings projected to be in the Nov cycle. RDN historically does have a tendency to be a better sale of vol than purchase into earnings (the one day straddle trade). <b>Possible Trades to Analyze</b> 1. Buy the Nov 7.5/9 strangle for $1.05. This requires RDN to be outside of [$6.45, $10.05] on Nov expo. 2. Do #1, but sell the Nov 10 calls @ $0.35, netting a $0.70 debit. This requires that RDN be outside of [$6.80, $9.70] on Nov. expo. However, this does limit the upside win to a takeover or big move up. 3. If you have a directional bet, one side of the strangle is reasonable. 4. #3, but first sell the Oct 9 calls @$0.10. If the stock is below the strike on Oct expo (i.e. this Friday), then sell the Nov 10 calls. This could limit the debit to just $0.60, though it carries it's own risks and selling $01.0 options is really a great strategy all of the time. 5. Skip Nov, look at the Jan'10 options. That same strangle is priced ~68 vol. Perhaps Jan'10 is the better vol play. This is trade analysis, not a recommendation. Details, trades, prices, vols, skews, charts here: <a href="http://livevol.blogspot.com/2010/10/mtb.html">http://livevol.blogspot.com/2010/10/mtb.html</a> Legal Stuff: <a href="http://www.livevolpro.com/help/disclaimer_legal.html">http://www.livevolpro.com/help/disclaimer_legal.html</a>
I follow RDN because it went to 0.01 on the flash crash ( from $10 ) and they lose hoards of money every year. I think long term they may go bankrupt, but the options are very expensive. I see the estimates for losses have shrunk so if they miss again badly this stock is toast. If anyone knows a reason why this company may turn around please post.