optionvol-NBC-Bay-Area

MSFT is trading $37.44, down 1.8% with IV30™ up small... again.... The LIVEVOL® Pro Summary is included below.


Provided by Livevol

Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. The Company operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD).

I last wrote about MSFT on 12-5-2013 (so, a week ago). You can that post by clicking on the title below and I have included the Symbol Summary from that date below as well.

Microsoft (MSFT) - Volatility Ripping; CEO Questions; and Stock Performance that May Surprise You...

12-5-2013

Provided by Livevol

On 12-5 and today, I found MSFT for the same reason: IV30™ elevated to multi-year highs.  I have included some snippets from the prior post, and then we can move on to today's action:

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This is both a stock and volatility note -- both of which were eye opening to me.

On the stock side we can see MSFT has been ripping over the last two-years, up more than 40% in that time frame.. I do note a nasty gap down off of earnings in the summer (the blue "E" icons represent earnings dates). I also note that the stock was just at multi-year highs.

So how has MSFT performed relative to the market and some other big names? Let's look at a one-year stock chart, below:

MSFT: Red
SPY: Yellow
GOOG: Green
AAPL: Blue


Provided by Livevol


But, there is also a volatility story here, and it's not trivial. Note that the current level for MSFT is an annual high and right on a multi-year high. For the last two years, the winter earnings release has been on 1-19-2012 and 1-24-2013. The Jan 2013 earnings date followed a release on 10-18-2012. This year MSFT released earnings on 10-24-2013. So, in English, MSFT likely has earnings due out in Jan '14, but the volatility is behaving like earnings are due out any day.

So what's going on? Well, there is a CEO hole that needs to be filled as Steve Ballmer (current MSFT CEO) is stepping down / retiring).
---

OK, that was the note a week ago.  Ford's CEO decided to stick with Ford (as he had been saying for quite some time), but the option market popped in risk on the actual news (which is odd).  Let's look today.

The MSFT Charts Tab (two-years) is included below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

We can see that MSFT stock is right about where it was from the prior post, a rather remarkable increase in market cap of ~ $100B in two-years, out pacing AAPL and the S&P 500 in returns over that time period.  But there's that pesky volatility again...

Let's turn to the two-year IV30™ chart in isolation, below.

Provided by Livevol

In the last post (12-5-2013) MSFT was near multi-year highs in IV30™.  We are now through that level and MSFT is hitting multi-year highs in the implied right now.  This time though, there is no "surprise CEO news."  this time there is no news at all... or is there?

Why is MSFT trading at multi-year highs in risk as the stock is booming, as the market is booming, as the economy is recovering (?)?.

Ya know... I have no idea... But when we look to the Skew Tab and the Options Tab (below), I see even weirder "stuff."

First, let's turn to the Skew Tab from six months ago, below.

Provided by Livevol

Now, look at the Skew Tab as of today.

Provided by Livevol

What we can see a stark change in the risk reflected by the options. namely, the skew today is parabolic and reflects both downside risk (which is normal) and upside potential (which is not normal). Something is afoot with MSFT.

To read more about skew, what is and why it exists you can click the title below:
Understanding Option Skew -- What it is and Why it Exists.

Finally, let's turn to the Options Tab.

Provided by Livevol

Note how similar the Jan and Feb vols are.  One of them has the earnings release, but why are they both priced so close to each other and at multi-year highs?  What is going on in MSFT?

For now, this can no longer be seen as the forgotten giant that putters around with an old business.  The stock has outperformed the ripping market, the largest firm in the world, and the risk in the option market is at unprecedented levels for the last two-years and the skew has shifted. The option market reads that MSFT matters again... I just don't know why yet...

This is trade analysis, not a recommendation.

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

TWTR closed Tuesday trading at $51.99, up 5.8% with IV30™ up 5.0%. The Symbol Summary is included below.


Provided by Livevol


Twitter, Inc. (Twitter) is a global platform for public self-expression and conversation in real time. Twitter is a real-time platform, where any user can create a Tweet and any user can follow other users. Each Tweet is limited to 140 characters of text, but can also contain rich media, including photos, videos and applications.

TWTR's IV60™ and IV90™ are 60.53% and 62.06%.

The company has earnings due out likely in Jan (possibly Feb expiry).  One quick question, did you know these firms all have higher 60-day implied volatilities than TWTR (and this excludes bio-techs)?


Provided by Livevol

Just to be clear, TWTR has lower vol than YELP (huh?) and TWTR has 30% lower vol than GOGO.

Let's see where this stock ends up, and take a snapshot (below) of what the option market reflects.


Provided by Livevol

Look at those ATM straddles... We'll re-visit in a month or two but for now the Option Market reads that TWTR will be in [$47.20, $54.65] on Jan 18. That feels like a tight price range... no?

This is trade analysis, not a recommendation.

Follow @OphirGottlieb

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

LL closed at $89.62, gapping down 13.7% with IV30™ popping 20.6%. The Symbol Summary is included below.


Provided by Livevol

Lumber Liquidators Holdings, Inc. (Lumber Liquidators) is retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The Company offers an assortment of wood flooring, which includes prefinished domestic and exotic hardwoods, engineered hardwoods, unfinished hardwoods, bamboo, cork and laminates, as well as resilient flooring.

I recently wrote about LL on 11-24-2013.  You can read that post by clicking on the title below.

Lumber Liquidators (LL) - The Finger Print of Fraud; Stock Gaps Down on Fraud Accusations; The "Expense Recognition" Game. Is Volatility Mis-priced?

As the title suggests, I questioned if the volatility was too low, or in English, if the risk reflected  the option market in the share price was to low.  I have included the Symbol Summary from that day, below.

11-24-2013

Provided by Livevol

Today we can see the stock is substantially lower and the volatility has popped ~ 25%.  Here are a few snippets from the prior article, then we can move on to the new stuff:

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I found this stock looking for the day's largest losers, and as is usually the case, there's quite a story behind this drop. The end results is both a stock and volatility story surrounding some scathing remarks made by a short-seller implicating management in multiple types of fraud. Oh, and by the way, the stock was up more than 650% in two-years before this news.

Here's the news, and it is ugly:

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Shares of Lumber Liquidators  were getting taken to the woodshed, falling 12% after Whitney Tilson, head of the Kase Capital Management hedge fund, announced a short position in the high-flying wood-flooring specialist. At an investor conference, Tilson noted a government investigation into potentially illegal timber imports by Lumber Liquidators, and suggested the company's gross margins, which have improved to better than 40% lately, were too good to be true. The hedge fund manager also cited a report from the non-profit Environmental Investigative Agency that said Lumber Liquidators' purchases "have fueled rampant illegal logging in Eastern Russia." Shares of the flooring retailer had more than doubled this year before today's drop, riding the broader housing recovery.

Source: The Motley Fool via Yahoo! Finance; Dow Hits Another Record, but Lumber Liquidators and Fresh Market Tumble, written by Jeremy Bowman.
---

I have added the italics and bold font to draw out the real news.

1. Kase Capital is shorting LL stock.
2. Whitney Tilson pointed out a government investigation into potentially illegal operations.
3. The gross margins for LL could be falsified.
4. Other potential shenanigans in Russia.

The accounting fraud game of expense recognition is often times seen in gross margins.  It can be done in several ways, but two of the most common are:

1. Blatant falsification of costs (under reporting).
2. Knowingly mis-classifying costs from COGS into SG&A and thus artificially boosting gross margins (operating revenue - COGS).

Either of these games is a major no-no, number one being worse than number two, but both, if true and discovered, likely result in an SEC Enforcement Action of Accounting Fraud.

Now remember, these are claims from a short-seller, not claims or actions from the regulators.  But, if there is an existing investigation, that means... there is a volatility story to be told.
---

Ok... So what happened today?  Here's that news:

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Lumber Liquidators retreats after profit outlook misses expectations
Shares of hardwood flooring retailer Lumber Liquidators (LL) are falling after the company provided lower than expected fourth quarter profit guidance. The midpoint of the company's 2014 profit guidance was also below analysts' consensus expectation. WHAT'S NEW: Lumber Liquidators' fourth quarter earnings per share guidance was 69c-72c, versus the consensus estimate of 73c. The company's fourth quarter revenue outlook was in-line with analysts' expectations. For 2014, Lumber Liquidators predicted that its earnings per share would be $3.25-$3.60, versus the consensus estimate of $3.50.

Source: TheFlyOnTheWall  via Yahoo! Finance; Lumber Liquidators retreats after profit outlook misses expectations

---


Let's look at the two year Charts Tab, below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

We can still see that remarkable 650% rise over two-years, but now we can also see the sharp downturn of late with the stock dropping from a high of $119.98 to now below $90.  With the stock at $101 I felt the implied volatility may have been to low.  I'll tell you what, with the volatility popping 25% higher, I still think it may be to low.

Let's turn to the two-year IV30™ chart in isolation below.

Provided by Livevol

We can see the remarkable rise off of the lows in mid November of ~33%.  The IV30™ has been as high as 54.82% this year, so we are near an annual high.  Even over the two-year period we see a high of ~55%.  I dunno, this does not feel like a 50% vol stock given the release today and the lingering accusations from before.  That doesn't mean I think the stock will go down (or up), it just means I think there's a lot of risk in this name right now.

Finally, let's turn to the Options Tab, below.

Provided by Livevol

Dec vol is priced to 58.69% while Jan'14 is priced to 48.23%.  You tell me, does Jan'14 vol feel like fair value right now?

This is trade analysis, not a recommendation.

Follow @OphirGottlieb

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

DISH closed Monday trading $54.64, down small with IV30™ popping 4.6%. The LIVEVOL® Pro Summary is included below.


Provided by Livevol

DISH Network Corporation is a pay-television (TV) provider, with approximately 13.967 million customers across the United States as of December 31, 2011. The Company offers a range of local and national programming, featuring more national and local high definition (HD) channels than pay-TV providers.

I found this stock using the real-time custom scan that searches for high vols relative to the short-term and long-term historical realized vol.  But this is also a stock note -- a fascinating one.

Custom Scan Details
Stock Price GTE $7 and LTE $70
IV30™ - HV20™ LTE 10
HV180™ - IV30™ LTE -8
Average Option Volume GTE 1,200
Industry isNot Bio-tech
Days After Earnings GTE 10 and LTE 60

The goal with this scan is to identify short-term implied vol (IV30™) that is elevated both to the recent stock movement (HV20™) and the long term trend in stock movement (HV180™). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume), want to avoid bio-techs (and their crazy vol) and make sure I'm not selling elevated IV30™ simply because earnings are approaching.

The two-year Charts Tab is included below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

On the stock side we can see a remarkable price appreciation from $25.68 two-years ago to now over $54 for a 110% rise.  I've included the DISH two-year stock price chart vs. the indices, below (SPY: yellow, NASDAQ: green, DIA: blue).

Provided by Livevol

So, we have a happy stock and a valuation of just over $25 billion... Did you know that?... I really didn't...

But this is also a vol note, so let's turn to the two-year IV30™ chart in isolation, below.

Provided by Livevol

Now we have an interesting story.  As the stock has been exploding, outpacing all indices and then some, the implied volatility has been rising.  In fact, as of today's close, it's right on an annual high.  Even more odd, check out that volatility rise since the last earnings release (the blue "E" icons represent earnings dates).

The IV30™ has risen from 29.6% on 11-20-2013 to now over 48%.  That's a 62% rise as the stock has risen from $49 on that November date.  Also interesting, note how low the implied got in early March (24.54%). The stock was trading at $35 at that time.  So what's going on with DISH?

Well there are rumors (and have been for a long time) that DISH and DTV (a $36 billion company) could merge.  Morgan Stanley called for some consolidation in the industry and there was that news of CMCSA and CHTR possibly bidding for TWC which could prove to be the beginning of such consolidation.  But... is that really the driver of risk in the next 30 days?... I dunno...

Finally, let's look to the Options Tab (below).

Provided by Livevol

Across the top we can see the monthly vols are priced to 48.53% for Dec and 48.08% for Jan'14.  Neither of those expiries have an earnings release, but both are priced above the back months which do have earnings release.

Head scratcher... Watch DISH, DTV and the rest of these guys.  If risk is afoot, market moving news may be as well.

This is trade analysis, not a recommendation.

Follow @OphirGottlieb

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

CNP is trading $23.29, down small with IV30™ ripping yet again, up 21.5%. The LIVEVOL® Pro Summary is included below.


Provided by Livevol

CenterPoint Energy, Inc. is a domestic energy delivery company. The Company’s business segments include Electric Transmission and Distribution, Natural Gas Distribution, Competitive Natural Gas Sales and Services, Interstate Pipelines, Field Services and Other Operations.

I found this stock using the real-time custom scan that searches for high vols relative to the short-term and long-term historical realized vol.  In short, the implied in this name has been exploding to multi-year highs and it's time to take a look.

Custom Scan Details
Stock Price GTE $7 and LTE $70
IV30™ - HV20™ LTE 10
HV180™ - IV30™ LTE -8
Average Option Volume GTE 1,200
Industry isNot Bio-tech
Days After Earnings GTE 10 and LTE 60

The goal with this scan is to identify short-term implied vol (IV30™) that is elevated both to the recent stock movement (HV20™) and the long term trend in stock movement (HV180™). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume), want to avoid bio-techs (and their crazy vol) and make sure I'm not selling elevated IV30™ simply because earnings are approaching.

The two-year CNP Charts Tab is included below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

On the stock side we can see how the price rose from ~$18 in Jan 2012 to as high as $25.22 in summer of this year.  More recently we can see a stock drop from ~$25 to now just over $23.

But when it comes down to it, this is a volatility note, so let's dig in. Let's turn to the two-year IV30™ chart in isolation, below.

Provided by Livevol

Check out that recent IV30™ spike from 19.77% on 11-21-2013 to now 36.80% on 12-9-2013.  That's an 86% rise in the short-term implied in about three weeks.  Even more astonishing is that the IV30™ for this firm reached 7.6% in Sep of 2012.

Ok, so all of this is earnings related, right?  Well, not really.  The last earnings report was 11-6-2013 and the next release is due out sometime in February.  So, this has nothing to do with an earnings report due out in the next 30 days, at least on the surface.

So what is going on?

To start, I see an article posted on 12-3-2013 with the headline "CenterPoint Energy Stock Getting Very Oversold."

Here's the snippet:

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In trading on Tuesday, shares of CenterPoint Energy, Inc (NYSE: CNP) entered into oversold territory, changing hands as low as $22.92 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of CenterPoint Energy, Inc, the RSI reading has hit 29.5 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 47.0, the RSI of WTI Crude Oil is at 51.8, and the RSI of Henry Hub Natural Gas is presently 65.4.

Source: Forbes via Yahoo! Finance; CenterPoint Energy Stock Getting Very Oversold, written by Energy Stock Channel, Contributor.

---

Apart from that, here's the news on the day the implied took one of its big jumps:

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CenterPoint Energy (CNP), OGE Energy (OGE) and ArcLight Capital Partners, LLC announced today that Enable Midstream Partners, LP has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission related to the proposed initial public offering of its common units representing limited partner interests worth approximately $500M. The offering is expected to occur in the first quarter of 2014.

Source: TheFlyOnTheWall via Yahoo! Finance; Enable Midstream files registration for $500M IPO.
---

Hmm...

Finally, let's look to the Options Tab (below).

Provided by Livevol

Across the top we can see that Dec vol is priced to 39.15% (a rip roaring multi-year high) while Jan'14 is also quite elevated at 35.19%.  Interestingly, the next earnings release should be after Feb expiry, by look at May vol... it's just 31.71%.  So what?  The what is that the current risk reflected in the option market from CNP shares is at multi-year highs and the near-term is seen as substantially more risky than the upcoming earnings event (or any earnings event in the last two-years).

Keep an eye on this one.

This is trade analysis, not a recommendation.

Follow @OphirGottlieb

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

MSFT is trading $37.82, down 2.9% with IV30™ up 13.4%. The LIVEVOL® Pro Summary is included below.


Provided by Livevol

Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. The Company operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD).

This is both a stock and volatility note -- both of which were eye opening to me. I found MSFT using the real-time custom scan that searches for high vols relative to the short-term and long-term historical realized vol.

Custom Scan Details
Stock Price GTE $7 and LTE $70
IV30™ - HV20™ LTE 10
HV180™ - IV30™ LTE -8
Average Option Volume GTE 1,200
Industry isNot Bio-tech
Days After Earnings GTE 10 and LTE 60

The MSFT Charts Tab (two-years) is included below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

On the stock side we can see MSFT has been ripping over the last two-years, up more than 40% in that time frame..  I do note a nasty gap down off of earnings in the summer (the blue "E" icons represent earnings dates).  I also note that the stock was just at multi-year highs.

So how has MSFT performed relative to the market and some other big names?  Let's look at a one-year stock chart, below:

MSFT: Red
SPY: Yellow
GOOG: Green
AAPL: Blue


Provided by Livevol

So MSFT has outperformed the index and AAPL, but GOOG is the biggest winner of this bunch.

But, there is also a volatility story here, and it's not trivial.  Let's turn to the two-year IV30™ chart in isolation,  below.

Provided by Livevol

Note that the current level for MSFT is an annual high and right on a multi-year high. For the last two years, the winter earnings release has been on 1-19-2012 and 1-24-2013.  The Jan 2013 earnings date followed a release on 10-18-2012.  this year MSFT released earnings on 10-24-2013.  So, in English, MSFT likely has earnings due out in Jan '14, but the volatility is behaving like earnings are due out any day.

So what's going on?  Well, there is a CEO hole that needs to be filled as Steve Ballmer (current MSFT CEO) is stepping down / retiring).  There was some speculation that Alan Mulally (Ford's CEO) would be the new top dog, but then this came out via AP today:

---
LOS ANGELES (AP) -- Microsoft shares fell 3 percent Thursday after Ford CEO Alan Mulally said that there is "no change in my plan" to stay with the automaker through the end of next year, dampening some investors' hopes he would take the top job at the software giant soon.

The stock's downturn came despite Mulally's comments on CNBC being no different than what Ford has been saying for months.

The market's reaction indicates investors were hoping the 68-year-old would in fact replace CEO Steve Ballmer, who is set to retire by August at the latest.

"It's clear that the market is hoping that Mulally is the lead candidate," said Morningstar analyst Norman Young.

Source: AP via Yahoo! Finance; Microsoft slumps after Mulally repeats 'no change'
---

So we have a firm that is up nearly $100 billion in market cap, near decade highs in stock price that can't seem to find a CEO.. OK, that was an overstatement, but you know what I mean...  By the way, for the Ballmer haters out there, look back at the stock chart comparison -- outperformed S&P500 and AAPL.  Not too shabby no?...

Finally, let's turn to the Options Tab.

Provided by Livevol

Here's the weird part... Across the top we can see that Dec vol is priced to 29.04% while Jan vol is priced to 26.24%.  But... Jan'14 should have earnings, right?...  Keep an eye on MSFT and the volatility.  This is no sleeping giant right now.

This is trade analysis, not a recommendation.

Follow @OphirGottlieb

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Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

KKD is trading $24.62, down 3.0 with IV30™ up 10.4%. The Symbol Summary is included below.


Provided by Livevol

Krispy Kreme Doughnuts, Inc. (Krispy Kreme) is a retailer and wholesaler of doughnuts complementary beverages and treats and packaged sweets.

This is a quick earnings note on KKD which is releasing earnings today AMC (in ~3 hours).  There are two phenomena regarding KKD that I just would not have guessed and when I saw them felt they were worth sharing.

Let's start with the Charts Tab (two-years) below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

Provided by Livevol

First, on the stock side, we can see a remarkable price appreciation from ~$7 two-years ago to now just under $25.  Whoa... Who would of thought a doughnut company would return more than 250% in two-years?...

But there's something much more interesting going on with KKD, and it's the implied volatility.  Let's turn to the two-year IV30™ in isolation, below.

Provided by Livevol

We can see the implied spiking from ~37% in mid October to now over 65%.  But, that's mostly earnings related... What really surprised me is the level of the elevation in the IV30™.  The current level is not only an annual high, but is just on the brink of a multi-year high.  Why is that weird, well how about this:

VIX is down
The market is up
It's Holiday time
KKD price is up

Yeah... Elevated vol into earnings, no problem.  Multi-year highs in volatility into this earnings... Hmm...

Finally, let's turn to the Options Tab.

Provided by Livevol

Across the top we can see tat Dec vol is priced to 73.26% and Jan to 54.73%.  That vol diff is simply the earnings release.  Now the question is, will the earnings release really rock the stock as much as the option market reflects?  I guess we'll see in three hours.

This is trade analysis, not a recommendation.

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