XCO is trading 15.28 up 1.2% with IV30™ down 2.8%. <p align="center"> <img src="http://3.bp.blogspot.com/_hMry1m7UF10/S_adbKjyjLI/AAAAAAAACf4/xeHaoTY3GXE/s1600/xco_summary.gif"> </p> The company has traded over 7,600 options in the first hour on total daily average option volume of just 2,195. The bulk of the trading has been a Sep 12.5/17.5 strangle. The Stats Tab and Day's biggest trades snapshots are included (<a href="http://livevol.blogspot.com/2010/05/xco.html">in the article</a>). The Options Tab (<a href="http://livevol.blogspot.com/2010/05/xco.html">in the article</a>) illustrates that both the calls and puts have traded at right around the level of the open interest (OI). A deeper investigation into those prior trades reveals an interesting result. Both lines opened yesterday. The Level II pop-ups (for both) are included (<a href="http://livevol.blogspot.com/2010/05/xco.html">in the article</a>). You can see the OI pop for both. The trades today in both lines appear to be purchases - so long vol. Yesterday the Sep 12.5 puts traded on Adjusted Terms (negotiated, possibly tied to stock and also possibly reported late). In English, I can't tell what side the puts were yesterday (buy or sell). The calls appear to be purchases (like today). My best guess is that this strangle opened yesterday and doubled down today (but we can't be sure until we see the OI on Monday on those lines). The Skew Tab snap (<a href="http://livevol.blogspot.com/2010/05/xco.html">in the article</a>) illustrates the vol that's trading relative to the rest of the option chain. The green line is Sep - the two strikes are highlighted. You can see it follows a pretty "normal" skew. To read what normal skew is and why it exists you can <a href="http://livevol.blogspot.com/2010/01/solarfun-solf-call-purchases-with.html">Click Here</a>. Finally, the Charts Tab (6 months) is below (<a href="http://livevol.blogspot.com/2010/05/xco.html">in the article</a>). The top portion is the stock price, the bottom is the vol (IV30™ is red, HV20™ is blue, IV60™ is yellow). The yellow shaded area at the very bottom is the IV30™ vs. the HV20™ vol difference. If this is a long strangle it goes in the money above $17.5 and below $12.5. Specifically, the strangle traded for ~ $2.35 ($1.05 in the puts and $1.30 in the calls). At expiration, this trade breaks even at $19.85 and $10.15. That's a pretty fat range. The stock chart illustrates that it's been well above $20 fairly recently. The 52 wk. low is just $14.48 though. This is an example of a vol buyer into fall, even as the implied vol (both the 30 and 60 day) have jumped past the realized (historical) vol (see bottom portion of chart above). Conclusion This bet (if it's a long strangle) bets on a large underlying move or at least higher vol. This is trade analysis, not a recommendation. Details, trades, prices, vols, skews, charts here: http://livevol.blogspot.com/2010/05/xco.html