Option update 10-26-007: YHOO and MSFT rally with YHOO volatility up, MSFT volatility down

Yahoo! Inc (NASDAQ: YHOO) recently up $2.40 to $33.74:

www.Alibaba.com, a Chinese internet company, is expected to be IPO'd on the Hong Kong bourse on November 6th. YHOO made a $1.4 billion investment in 39% of Alibaba in 2005. YHOO Chairman of the Board Terry Semel sold 850,000 shares of YHOO at $30.47 October 23-24, according to Dow Jones. YHOO call option volume of 503,701 contracts compares to put volume of 52,600 contracts. YHOO November option implied volatility of 50 is above its 26-week average of 37 according to Track Data, suggesting larger price risk.

Microsoft Corporation (NASDAQ: MSFT) recently up $2.91 to $34.90:

Pacific Growth Equities says " Blowout F1Q results; conservative guidance leave room for additional upside if the sales momentum continues." MSFT call option volume of 353,588 contracts compares to put volume of 114,142 contracts. MSFT November option implied volatility of 25 is below a pre-EPS level of 32 according to Track Data, suggesting decreasing risk.

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