Options update: Tire manufacturers volatility low into Obama tariffs on Chinese tires

Posted Sep 15th 2009 9:00AM by Paul Foster
Filed under: Options, Goodyear Tire and Rubber (GT)

Cooper Tire & Rubber (NYSE: CTB) rallied to $15.60 on September 14 on news President Obama decided to side with the United Steelworkers and impose temporary tariffs on Chinese car tires. CTB October option implied volatility is at 66, November and January is at 68; below its 26-week average of 79, according to Track Data, suggesting decreasing price movement.

Goodyear Tire (NYSE: GT) closed at $17.78. GT overall option implied volatility of 56 is below a level of 190 from November 2008 and above its 52-week low of 54 from July, according to I Volatility, suggesting larger price movement.

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

Tags: Cooper Tire Rubber, CooperTireRubber, Goodyear Tire, GoodyearTire, option implied volatility, OptionImpliedVolatility, United Steelworkers, UnitedSteelworkers