Stocks End Mixed, VIX Vol Closes Flat
Markets closed mixed as stocks remain relatively resilient, having shrugged off poor action in some key emerging markets and a couple of worse-than-expected U.S. economic numbers. Selling pressure, both from longs exiting positions as well as from shorts, was sparse and buyers continued to view dips as buying opportunities. All together, there was not much conviction in either direction as traders try to avoid large market movements in the remaining days of 2010.
The Dow Jones Industrial Average ended up 20.51 points, or 0.18%, to close at 11,575. The S&P 500 rose 0.97 of a point, or 0.08%, to close at 1258, and the NASDAQ was down 4.39 points, or 0.16%, to finish at 2662.
CBOE Volatility IndexI:VIX volatility ended flat as traders refrained from opening expensive positions to close down 0.85%, at $17.52. 60-day implied volatility is at 78 and 90-implied volatility is at 73, indicating slightly lower price movement in the outer month contracts. 42,000 put contracts traded, compared to 53,000 call contracts, with January 18 puts as the most active series on 14,500 contracts.
SPDR S&P 500 ETF (SPY) - Get Report puts were active with volatility edging higher as short interest on the S&P 500 decreased 4.15%, to 7.29 billion shares as of December 15, according to data compiled by U.S. exchanges and Bloomberg. SPY touched a 52-week high to close up $0.18, at $125.83, on overall put activity of 469,000 contracts compared to 230,000 call contracts.
PowerShares QQQ Trust (QQQQ) February and March volatility trended higher as the ETF closed down $0.10, at $54.67. March 55 calls were the most active series traded on put contract volume of 48,000 compared to 65,000 call contracts. January put option implied volatility is at 18, February is at 20 and March is at 22 versus its six-month average of 22, suggesting larger outer-month price movement compared to near months.
Molycorp (MCP) volatility increased as shares rallied to record high, but ultimately closed down $3.26, at $46.18, after trading as high as $55.22. The rare earth mining company said that production at its Mountain Pass mines in California would not start for months, as reported by CNBC. Overall, 37,000 put contracts traded compared to 38,000 call contracts. 60-day implied volatility is at 79 and 90-day is at 74, above its five-month average of 65.
The remainder of the week will be very quiet as there are no major corporate events on the calendar and very few economic ones. The following data are expected to be released on Wednesday: MBA Purchase Applications due out at 7:00 a.m. EST and the EIA Petroleum Status Report at 10:30 a.m. EST; Thursday: Jobless Claims due out at 8:30 a.m. EST. Chicago PMI at 9:45 a.m. EST, Pending Home Sales at 10:00 a.m. EST and the EIA Natural Gas Report at 10:30 a.m. EST; Friday: None.
OptionsProfits For actionable options trade ideas from a team of experts, visit TheStreet's OptionsProfits now.
Readers Also Like:
>>Three Smart Money Bank Plays for 2011
Readers Also Like:
>>Analyzing Volatility and Making a Trade in Pfizer
Readers Also Like: