This column was originally published on RealMoney on May 17 at 5:12 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
Lucky number seven: The Nasdaq has now declined seven days in a row.
And the first shall be last: Some of the recent biggest gainers in transportation, oil and machinery, such as
suffered the biggest losses today.
The VIX jumped to a new nine-month high of 15.60, and even though that mid-teen level is low on an absolute basis, it still represents a very extreme reading for the current environment. The put/call ratio hit its high of 1.78 early and stayed above 1.45 for the remainder of the day. While rolling ahead of expiration can skew this reading, I think the fact it stayed above 1.45 for the remainder of the day illustrates the growing concern about further declines. Which of course is a bullish sign.
Among the most active options was
which saw over 45,000 of its June $18 calls trade.
Stocks which saw above-average option volume and increases in implied volatility include
( MEDI), whose IV jumped up 29% even as the stock gained 4% on research upgrades.
IV increased 21% as the stock slipped 5% to $52.
Options seeing a post earnings decline in IV included
Abercrombie & Fitch
, whose IV fell 12% as the stock gained 3% on better than expected earnings.
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;
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