USG - Big Bets With Vol Rise After Earnings

USG is trading 23.94 with IV30&#8482 up 15.6%.

<img src="http://3.bp.blogspot.com/_hMry1m7UF10/S9HoYlh9lNI/AAAAAAAAB_o/4-JjrqxLBtA/s1600/usg_summary.gif">

The company has traded over 36,800 options today on total daily average option volume of just 1,988. The largest trade was a call spread purchase in Jun. Calls alone have traded more 15x average total volume on a 5:1 ratio with puts. The Stats Tab and Day's biggest trades snapshots are included (<a href="http://livevol.blogspot.com/2010/04/usg.html">in the article</a>).

The Options Tab (<a href="http://livevol.blogspot.com/2010/04/usg.html">in the article</a>) illustrates that the active calls in May, Jun and Aug are mostly (or partially) opening as volume > OI. The May 25, Jun 25 and Aug 25 calls are predominantly purchases - the Jun 27.5 are sales to a spread. You can also see how vol is climbing size today. IV30&#8482 went from 50 to 40 after earnings a few days ago - and now it's right back to 50.

The Skew Tab snap (in the article) is interesting in that it's not... It just looks like a normal skew - no calls in any month seem out of line. To read why skew exists and what "normal" shape is you can <a href="http://livevol.blogspot.com/2010/01/solarfun-solf-call-purchases-with.html">click here</a>.

If the order flow continues I imagine at some point the upside would bend. Finally, the Charts Tab (6 months) is below (<a href="http://livevol.blogspot.com/2010/04/usg.html">in the article</a>). The top portion is the stock price, the bottom is the vol (IV30&#8482 - red vs HV20&#8482 - blue). The yellow shaded area at the very bottom is the IV30&#8482 vs. the HV20&#8482 vol difference.

You can see the steep run up in stock off earnings from ~$19 to now over $23 in just a week. I've also blown up the vol chart and hyper magnified on just a few days to illustrate the weird vol moves (in the article). The rise into earnings and drop are normal - the re-rise is the odd part.

This is trade analysis, not a recommendation.

Details, trades, vols, skews, prices, charts here:
http://livevol.blogspot.com/2010/04/usg.html

 

Some dyslexic traders may be confusing the ticker symbol with "GS".

 

Yeah, very true... Don't get me started on GS...

 

?.....you'll feel "better" when it's trading below $155/share?

 

I'd feel better when it's $0... but let me buy those puts first... ha ha...

 

?.....October "par" puts?

 

Everytime I want to buy an option I change my mind and want to sell it... lol... :eek: