Rohm and Haas (NYSE-ROH) is recently trading at $48.66 in pre-open trading, below its close of $63.56. ROH, the acquisition target of Dow Chemical (NYSE-DOW), lost access to $9 billion of Kuwait financing. January option implied volatility of 146 is above its 26-week average of 29, according to Track Data, suggesting larger price movement.
DOW is recently trading at $18.00 in pre-open trading, below its close of $18.92. Smith Barney says, "DOW should be looking to protect its shareholders by cutting the ROH deal at a lower price or walking away from the deal by paying a break up fee." DOW January option implied volatility of 59 is above its 26-week average of 49, according to Track Data, suggesting larger price movement.
Volatility Index S&P 500 Options-VIX at 43.38; 10-day moving average is 48.26.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
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