TDW - Call Order Flow Pushes Stock and Vol Up

Discussion in 'Options' started by livevol_ophir, Apr 30, 2010.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    TDW is trading 55.21 up $2.17 with IV30™ up 13.4%.

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    The company has traded 14 times avg volume in just the first hour - 5,500 options in the first hour on total daily average option volume of just 397. All but 810 contracts have been calls for a 6:1 call: put ratio. The largest trade has been the May 55 calls - purchases for $2.10. AMEX marked these as spreads, but I don't see that. The Stats Tab and Day's biggest trades snapshots are included (<a href="">in the article</a>).

    The Options Tab (in the article) illustrates that the calls are opening; OI is just 706 versus first hour volume of 3,585. Further we can see the IV per month jumping even in the months where there is limited trading. Note that earnings are scheduled for the end of this options cycle - so the May options do have a known vol event.

    The Skew Tab snap as of right now shows a couple things (<a href="">in the article</a>).

    1) The front month (red) is considerably higher than the back months (40 vs. 34,32 and 31 respectively).
    2) The skew hasn't really bent up. I've highlighted the 55 line - note that with the stock pop those are actually in the money now. The 60 line still bends down. To read why sklew exists and what it "normally" does you can go: <a href="">here</a>.

    Finally, the Charts Tab (6 months) is below (<a href="">in the article</a>). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue). The yellow shaded area at the very bottom is the IV30™ vs. the HV20™ vol difference.

    You can see thes stock has jumped for a low of $43.52 on 2-25-2010 to over $55 today or about 28% in two months. If the stock stays strong with consistent order flow - this may one to watch right before earnings.

    This is trade analysis, not a recommendation.

    Details, trades, vols, skews, prices here: