Yesterday's tradable bounce off of support at 1260 in the S&P 500 certainly was short-lived. Implied volatility levels picked up across the board, particularly, and not surprisingly, in technology names. Among the names that saw price declines through old support levels and increased IV were Network Appliances (NTAP - commentary - Cramer's Take), Tellabs (TLAB - commentary - Cramer's Take), Adobe (ADBE - commentary - Cramer's Take), and Broadcom (BRCM - commentary - Cramer's Take).
United Technologies (UTX - commentary - Cramer's Take) saw IV of its options surge 30% on no apparent news apart from that it successfully tested an intercept missile that has "attitude control" capability. The company reports earnings on July 18.
The post-earnings volatility crush du jour occurred in two biotech companies, Genzyme (GENZ - commentary - Cramer's Take), whose shares jumped 7% while IV fell 15%, and Genentech (DNA - commentary - Cramer's Take), whose shares fell 3% while IV declined 13%.
On a separate issue, I'm having difficulty posting replies in the comments section. I apologize and we're working on it.
P.S. Will you be there when Cramer makes his next move?
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Steven Smith Blog Calling Qualcomm 7/12/2006 10:49 AM EDT A big hitter may be selling calls to overwrite a long stock position.
Steven Smith Blog Ending Up 7/11/2006 4:49 PM EDT Tuesday's turnaround could lead to a follow-through Wednesday.
Steven Smith Blog A Little Lift in the VIX 7/12/2006 2:17 PM EDT The volatility metric is at the high end of its two-week range, while the put/call surges on put protection.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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