Option update: EMC implied volatility up on VMware IPO

EMC (NYSE: EMC) implied volatility Elevated at 53 into VMware IPO. EMC closed Friday at $17.72. VMware, an EMC company, is the global leader in virtual infrastructure software for industry standards. VMware is expected to be spun out of EMC this week. Morgan Keegan said on August 10, "We estimate a fair value range of $18.90-$25.33 for EMC shares. This range assumes $12.90 per share for the core EMC business and $6.00-$12.43 per share for VMware." EMC September option implied volatility of 53 is above its 26-week average of 28 according to Track Data, suggesting larger risk.

E-Trade (NYSE: ETFC) volatility Elevated on concerns of mortgage portfolio. ETFC closed Friday at $17.01. Smith Barney says, "Disclosure in 10-Q short on substance from our viewpoint. Management provided minimal new information on the composition of its $28 billion mortgage portfolio." ETFC overall option implied volatility of 55 is above its 26-week average of 35 according to Track Data, suggesting larger price fluctuations.

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