Options update 1-11-08: WaMu volatility aggressive amid buyout speculation

Posted Jan 11th 2008 9:12AM by Paul Foster
Filed under: Deals, JPMorgan Chase (JPM), Washington Mutual (WM), Options

Washington Mutual (NYSE: WM) is recently trading at $15.50 in pre-open trading, above its close of $14.16. CNBC reported JPM in talks to buy WM. WM shares have sold off from a price of $44 in May on consumer and small business economic concerns.

WM will report EPS on January 17th. WM January 15 straddle is priced at $2.65. WM overall option implied volatility of 95 is above its 26-week average of 52 according to Track Data, suggesting larger risk.

JPMorgan Chase (NYSE: JPM) closed at $41.31. JPM will report EPS on January 16th. JPM January straddle is priced at $3.25. JPM February option implied volatility of 45 is above its 26-week average of 32 according to Track Data, suggesting larger risk.

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

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