Option update 7-31-07: Alcatel-Lucent volatility elevated after loss

Alcatel-Lucent (NYSE: ALU) near-term volatility skewed up after reporting second-quarter EPS loss of €0.15.

• ALU, the world's biggest manufacturer of telecommunications equipment, reported second quarter revenues that rose 0.5% year-over year at constant Euro/USD Exchange Rate.
  
• Bank of America says: "We continue to see solid fundamentals with positive restructuring benefits. We reiterate our Buy rating." Goldman Sachs says: "Gross margin disappointment limits upside; Downgrade to Neutral."
  
• ALU August option implied volatility is at 43 verses over all implied volatility of 33 according to Track Data, suggesting larger near term risks.

Wyeth (NYSE: WYE) volatility elevated into Protonix Injunction hearing.

• WYE, is engaged in the discovery, development, manufacture, distribution, and sales of products in pharmaceutical, healthcare and animal health.
  
• COWN said on July 25 WYE: "Protonix (helps control nighttime heartburn) will be subject of a July 31st Preliminary Injunction hearing, in advance of a potential at-risk launch by Teva (NYSE: TEVA) on August 2nd. We believe that WYE will prevail on the merits. Unfortunately, there is little upside and significant downside to this event."
  
• WYE August option implied volatility of 33 is above its 26-week average of 22 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.