Options update 12-26-07: MER volatility stays elevated following recent news

Posted Dec 26th 2007 9:30AM by Paul Foster
Filed under: Analyst Reports, General Electric (GE), Merrill Lynch (MER), Options

Merrill Lynch (NYSE: MER) -

Merrill announced on December 24 it was enhancing its capital position by up to $7.5 billion with agreements to raise up to $6.2 billion through newly issued common stock with Temasek Holdings and Davis Selected Advisors and the sale of ML Capital to GE Capital.

Smith Barney says: "We expect that this is just the beginning of management's actions to sell non-core operations, and we expect these sales will be accretive to ROE."

MER overall option implied volatility of 45 is above its 26-week average of 38 according to Track Data, suggesting larger risk.

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

Tags: Davis Selected Advisors, DavisSelectedAdvisors, GE, inthenews, mer, merrill lynch, MerrillLynch, ML Capital to GE Capital., MlCapitalToGeCapital., option implied volatility, OptionImpliedVolatility, Temasek Holdings, TemasekHoldings