Options Buzz
If traders missed out on taking a short, or negative, position on the market, it might be too late to try, according to some options
market pros.
| Volatility Index | |
| Today | % Change |
| 33.80 | -0.09 |
| Source: ILX | |
| Nasdaq Volatility Index | |
| Today | % Change |
| 73.09 | -0.18 |
| Source: ILX | |
Call
option volume was robust in American Express (AXP) in the wake of a report by Gene Marcial in Business Week that says the company is being eyed by Citigroup (C). The column also mentions that Morgan Stanley Dean Witter (MWD) and American International Group (AIG) are interested in AmEx, the credit card giant. Shares of AmEx rose $2.39, or 6%, to $41.35. This isn't the first time that AmEx has been mentioned as a takeover target. In early
February, AmEx options volume exploded on rumors that the company was going to get bought. As with many rumors and speculation in the market, nothing came of the AmEx chatter. It looks like people are taking a shot today, however. The April 40 calls were seeing a decent amount of interest on the Chicago Board Options Exchange, with more than 1,100 contracts trading. The calls rose 1.50 ($150) to 3.20 ($320). Paul Foster of 1010WallStreet.com in Chicago said that implied volatility on AmEx options has risen modestly, but not a great deal today. Before the open, the implied volatility in the April 40 options was 53-55, while it was at 57 late in the morning. He pointed out that implied volatility was much higher at points earlier in the year. "I'm not going to buy it today on a Business Week [story]," Foster said. He did add, however, he will be watching AmEx more intensely. "There's a story there." He said it's tough to buy April options with three weeks until expiration unless you have strong conviction on the underlying stock. The time decay in the options will increasingly tumble as expiration approaches.
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note |
|
|---|---|---|---|---|
| 12,454.83 | 1,317.82 | 2,837.53 | 17.45 |
Oil *
107.26
|
|
DOWN
74.92 |
DOWN
2.86 |
DOWN
1.85 |
DOWN
0.14 |
10 Yr
1.74%
SPDR Gold
152.68
|
|
-0.60%
|
-0.22%
|
-0.07%
|
-0.80%
|
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