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U.S. stocks were lower on an increase in December new job creation and higher wages. Interest rates rose. The Dow was down 0.62%, NASDAQ 100 down 0.76%, S&P 500 down 0.58%, and the 10-year bond rate rose to 4.646%. Volatility Index S&P 500 Options-VIX rose .56 to 12.07.- Global Payments Inc.'s (NYSE: GPN) implied volatility increases: Global sells off on tighter guidance. Global Payments is recently down $8.15 to $40.90 after the company lowered its 2007 revenue guidance. Goldman Sachs said, "we believe key questions remain: 1) Is Western Union exerting significant pressure in the Mexico money transfer market, and when (in the November quarter, or in the current February quarter) did the pricing environment begin to deteriorate? How significant are the pricing changes?" Global Payments' call option volume of 5,689 contracts compares to put volume of 1,723 contracts. February option implied volatility of 35 is above its 26-week average of 29, according to Track Data, suggesting larger price risks.
- AtheroGenics' (NASDAQ: AGIX) option implied volatility was aggressive into top-line data. Athero and collaborating partner AstraZeneca (NYSE: AZN) are expected to release top line data from the ARISE Phase 3 trial on AGI-1067 (coronary heart disease treatment) in late winter/early spring of 2007. Canaccord Adams said yesterday "we view the ARISE data as an extremely binary event for AGIX, with the potential for dramatic stock movement." Athero is speaking at JPMorgan healthcare conference on January 10th. Athero overall option implied volatility of 229 is above its 26-week average of 115, according to Track Data, suggesting large price fluctuations.
- Dell Inc.'s (NASDAQ: DELL) option implied volatility is at 31 heading into the 2007 Consumer Electronics Show. Dell founder and chairman Michael Dell will give a keynote presentation on January 9th at the CES in Las Vegas. Mr. Dell is expected to describe how customer imagination is the most important driver of innovations, and introduce new products & services. Dell is expected to report EPS in mid-February. Dell overall option implied volatility of 31 is above its 26-week average of 28, according to Track Data, suggesting increasing price fluctuation.
- Motorola Inc.'s (NYSE: MOT) February option implied volatility is at 30 as the company lowers its profit outlook. Motorola warned it will miss its Q4 financial targets because of less than expected sales in its mobile phone division. Bear Stearns said, "Too many question marks; Downgrade to Peer Perform from Outperform." Motorola chairman & CEO Ed Zander will give a keynote presentation on 1/8/07 at the CES. Motorola's February option implied volatility of 30 is near its 26-week average of 31, according to Track Data, suggesting non-directional fluctuations.
Options analysis provided by Paul Foster, options strategist for Theflyonthewall.com.
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