Option update: Credit card providers' implied volatility increases

Posted Aug 6th 2007 10:04AM by Paul Foster
Filed under: American Express (AXP), Options

Discover (NYSE: DFS) volatility Elevated as DFS closes at post Morgan Stanley (NYSE: MS) spin-out low. DFS, which operates the Discover Card with more than 50 million card members, closed at $21.99. Keefe Bruyette says, "We are upgrading DFS to Outperform from Market Perform given the recent weakness in the company's shares." DFS' overall option implied volatility of 48 is above its five-week average of 39 according to Track Data, suggesting larger risk.

American Express (NYSE: AXP) implied volatility Elevated at 38. AXP closed at $57.49. AXP overall option implied volatility of 38 is above its 26-week average of 23 according to Track Data, suggesting larger risk.

Capital One Financial (NYSE: COF) volatility Elevated as COF closes near three-year low. COF, a diversified financial services company, closed at $67.34. COF overall option implied volatility of 42 is above its 26-week average of 28 according to Track Data, indicating larger price risks.

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

Tags: American Express, AmericanExpress, AXP, Capital One Fin'l, CapitalOneFin'l, COF, credit cards, CreditCards, debit card, DebitCard, DFS, Discover, diversified financial services, DiversifiedFinancialServices, option implied volatility, OptionImpliedVolatility