Lowe's (NYSE: LOW) implied volatility of 38 above 26-week average of 33 into EPS. LOW is expected to report EPS of .61 cents on 8/20, according to Thomson First Call. Deutsche Bank said on 8/16, "while we are slightly reducing our 2Q and FY EPS on a weak environment, we note that consensus already reflects conservative sales and EPS views." LOW September option implied volatility of 38 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Pep Boys (NYSE: PBY) September implied volatility Elevated at 61 into EPS. PBY, an operator of automotive retail and service chains, has a market cap of $784 million. PBY is expected to report EPS on 8/22. Morgan Joseph CO says, "update on potential sale/leaseback of property possible. During its last conference call, PBY confirmed a 2004 appraisal that valued its owned property as around $900 million and belief that today it is worth in excess of $1 billion." PBY September option implied volatility of 61 is above its 26-week average of 38 according to Track Data, suggesting larger price risk.

Daily options update is provided by stock specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY:

• RBC Capital Markets initiated three Chinese Internet companies this morning: Baidu.com Inc (NASDAQ: BIDU) with a Sector Perform and a $124 price target, SINA Corporation (NASDAQ: SINA) with a Sector Perform and a $39 price target, and Sohu.com Inc (NASDAQ: SOHU) with an Outperform and a $33 price target. RBC believes Sohu.com is well positioned to benefit from secular growth in online advertising and is the most direct beneficiary of the 2008 Beijing Olympics, as it hosts the official site.

• Citigroup Inc (NYSE: C) was initiated by JP Morgan with an Overweight. The firm sees performance in international, corporate and investment banking improving.
• Callaway Golf Company (NYSE: ELY) was initiated by Morgan Joseph with a Buy and $19 price target.