SOL is trading $9.25, down 5.8% with IV30⢠up another 5.7%. The <a href="http://www.livevol.com/">LIVEVOL⢠Pro Summary</a> is <a href="http://livevol.blogspot.com/2010/11/sol.html">in the article</a>. <img src="http://www.livevolpro.com/help/images/blog/sol_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> ------------------------------------------------------------------- SOL is a manufacturer of solar wafers and producer of solar power products based in China. I found this stock using a real-time custom scan. This one hunts for high vols. <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. The Charts Tab is included (<a href="http://livevol.blogspot.com/2010/11/sol.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://www.livevolpro.com/help/images/blog/sol_charts.gif" width="600" /> We can see: IV30â¢: ~81.68 HV20â¢: 63.89 HV180â¢: 71.07 So, IV30⢠is elevated relative to the short term and long term realized movement of the stock. An added bonus can be seen in the Skew Tab <a href="http://livevol.blogspot.com/2010/11/sol.html">in the article</a>. What's the hotness here is that the ATM strike is elevated (per chart above) and is elevated per the surrounding strikes. The Dec 9 line is priced at ~83 vol. On the other hand, the Dec 7.5 puts are priced at ~75 vol and the Dec 10 calls are priced at ~81 vol. Let's look to the Options Tab (<a href="http://livevol.blogspot.com/2010/11/sol.html">in the article</a>). <b>Possible Trades to Analyze</b> 1. Vol is elevated, though the stock looks like the stock might decide to go back down to $3. That's one ugly stock chart... Sell the Dec 9 straddle @ $1.75 or ~ 82 vol. 2. Do #1, but cover with a Dec 7.5/10 strangle for $0.80, or a total $0.95 credit. This sells the elevated vol and buys the "cheaper" wings (see skew chart). It sells 82 vol and purchases ~78 vol. The risk is to the downside, as the upside has a max loss of $0.05. I've included a PnL chart of this strategy <a href="http://livevol.blogspot.com/2010/11/sol.html">in the article</a>. 3. Do #1, and buy just one side to cover (i.e. buy a call or put but leave the other side naked). NB: This is a Chinee solar stock, so ya know, there's some risk to being naked short options here. The 52 wk. range for this stock is [$3.65, $15.34]. That's pretty wide. 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/sol.html">http://livevol.blogspot.com/2010/11/sol.html</a> Legal Stuff: <a href="http://www.livevolpro.com/help/disclaimer_legal.html">http://www.livevolpro.com/help/disclaimer_legal.html</a>