Daily option update - March 2, 2007

Posted Mar 2nd 2007 12:58PM by Paul Foster
Filed under: Products and Services, Dell (DELL), Amer Intl Group (AIG), Options

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Mirant Corp. (NYSE:MIR) implied volatility Elevated at 32 as MIR trades near Record levels.

MIR is expected to report full EPS & hold a conference call on 3/5. MIR has been frequently mentioned as a potential candidate for announcing a recapitalization or a share repurchase. MIR call option volume of 1,044 contracts compares to put volume of 3,001 contracts. MIR overall option implied volatility of 32 is above its 26-week average of 26 according to Track Data, suggesting larger price risks.

New Century Financial Corp (NYSE:NEW) low cost deep OTM April & May 5 put spread trades as Hedge.

NEW, a real estate investment trust, providing mortgage products to borrowers nationwide, is recently down 37c to $15.47. NEW deep out of the money April 5 puts traded 4,715 contracts near the bid at .12 & .13 cents above its theoretical value of .01 cent. NEW deep out of the money May 5 puts traded 5,568 contracts on the offer of .40 cents above theoretical value of .04 cents according to Track Data, suggesting spreaders paying up to hedge risk.

Micron Technology Inc. (NYSE:MU) implied volatility suggests favorable risk as MU at 18-month low on LBO chatter.

MU is engaged in the manufacturing and marketing of dynamic random access memory, flash memory, complimentary metal-oxide semiconductor image sensors. MU is recently up 21c to $12.07 on unconfirmed LBO chatter. MU has a market cap of $8.9 billion with long term debt of $400 million. MU has cash and short-term investments of $2.6 billion. MU reported 2006 revenue of $5.2 billion. MU trades at a P/E of 19 below the industry average of 27. MU March option implied volatility of 32 & overall option implied volatility of 33 is below its 26-week average of 35 according to Track Data, indicating decreasing risk.

Option volume leaders today were: Dell Inc. (NASDAQ-DELL), AIG Inc. (NYSE-AIG), Domtar Inc.(NYSE-DTC) and Weyerhaeuser Co. (NYSE-WY).

Tags: Dell Computer, DellComputer, delta, domtar, dtc, elevated, EPS, hedge, Micron, mir, mortgage, mu, New, option volume, OptionVolume, paper, risk, subprime, Track Data, TrackData, Utility, weyerhaeuser, wy