Options update: Options indicate Elevated risk

Posted Aug 16th 2007 4:45PM by Paul Foster
Filed under: Forecasts, Bad News, Rumors, Law, Employees, Countrywide Financial (CFC), Options, Housing

Volatility Index S&P 500 Options-VIX up 6.30 to 36.97; 10-day average is 26.78

E-Trade (NASDAQ: ETFC) put volume & volatility at Panic levels on sell-off. ETFC is recently down $3.28 to $10.60. SBSH said on 8/12 "Disclosure in 10-Q short on substance from our viewpoint. Mgmt provided minimal new information on the composition of its $28 billion mortgage portfolio."
ETFC call option volume of 37,882 contracts compares to put volume of 87,399 contracts. ETFC September option implied volatility of 210 is above its 26-week average of 37 according to Track Data, suggesting large price fluctuations.

Countrywide Financial - (NYSE: CFC) put volume & volatility Spike; indicating Crisis. CFC, a home mortgage lender, is recently down $4.18 to $17.13. CFC announced "it has supplemented its funding liquidity position by drawing on an $11.5 billion credit facility." Moody's Investors Services downgraded CFC rating to Baa3. CFC call option volume of 204,765 contracts compares to put volume of 412,286 contracts. CFC September option implied volatility of 210 is above its 26-week average of 56 according to Track Data, indicating larger price fluctuations.

More Countrywide Financial news

Peter Cohan: What the mortgage meltdown means to you
Eric Buscemi: George Bailey, meet Angelo Mozilo
Kevin Shult: Analyst downgrades: AN, CFC, DRI and RARE
Peter Cohan: Countrywide (CFC) meltdown continues
Michael Fowlkes: Countrywide Financial (CFC) adds to subprime panic
Peter Cohan: Could Countrywide Financial (CFC) be put down?
Sheldon Liber: Buy on fear today? Bear Stearns (BSC), Countrywide (CFC), IndyMac (IMB), Popular (BPOP), Washington Mutual (WM)

Sharper Image Corp (NASDAQ: SHRP) volatility Elevated at 99 as SHRP at record low. SHRP is recently down $1.56 to $4.09. Law.com carried a headline saying "SHRP claims reimbursing customers will cause bankruptcy" www.Law.com says "U.S. District Judge Cecilia Altonaga must weigh SHRP's financial health against the demands of various plaintiff groups and attorneys general who want customers compensated for $300 air purifiers they say were ineffective." SHRP September option implied volatility of 99 is above its 26-week average of 48 according to Track Data, suggesting larger risk.

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

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