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Investing Ideas From 5 Companies Facing High Implied Volatility

The options market provides insight for investors looking for companies that may have recently experienced large price swings. In the options market, large price swings increase the value of the call or put. [More List Ideas:  6 S&P 500 Dividend Stocks Undervalued by the Graham Number]

More importantly, investors looking for buying and selling ideas could also anticipate the volatility, along with the price swings, to continue in the short-term. Some of the companies having the highest volatility are listed below: 


High Implied Volatility


1. Brocade Communications Systems, Inc. ( BRCD ): Supplies networking equipment comprising end-to-end Internet protocol based Ethernet and storage area networking solutions. Market cap at $2.55B, most recent closing price at $5.60.

The February $6 call options had an implied volatility of 43.6%. Volatility rose for Broadcade after OCZ Technology (OCZ) provided weak guidance. In early-January, Mellanox (MLNX) warned markets that its quarterly results would be weak. Brocade also named a new CEO. Lloyd Carney comes from Xsigo Systems, a company acquired by Oracle. Brocade also won an injunction against A10 Networks, a private company. Brocade won $112 M from A10 last summer.

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2. Thomson Reuters Corporation ( TRI): Provides intelligent information for businesses and professionals in the financial, legal, tax and accounting, healthcare, science, and media markets worldwide. Market cap at $25.58B, most recent closing price at $30.93.

A Libor overhaul threatens to remove Thomson Reuters as administrator of Libor. Shares have performed poorly since 2008, when Thomson and Reuters merged.

Tool provided by Kapitall. Click to access free research tools, share practice portfolios, and more. 

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