Option update 7-31-07: Unconfirmed chatter Apple reducing iPod production

Apple (NYSE: AAPL) volatility elevated on unconfirmed chatter iPod production reduced.

• AAPL is recently down $3.90 to $137.50 on unconfirmed chatter AAPL reduced iPod production.
  
• AAPL announced three billion songs have been purchased and downloaded from iTunes.com.
  
• RBC Capital reiterated its Outperform rating on AAPL.
  
• AAPL call option volume of 106,511 contracts compares to put volume of 87,001 contracts. AAPL August option implied volatility of 43 is above its 26-week average of 37 according to Track Data, suggesting larger risk.

Under Armour (NYSE: UA) volatility flat as UA rallies to record after EPS.

• UA is recently up $7.97 to $63.23 after UA reported 2nd EPS of 11 cents, above consensus estimates of 3 cents. UA revenues grew 50% to $120.5 million.
  
• Smith Barney has a Hold rating with a $52 price target on UA.
  
• UA call option volume of 5,072 contracts compares to put volume of 3,440 contracts. UA September option implied volatility of 42 is near its 26-week average according to Track Data, suggesting flat price risks.

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