Medicines Co (NASDAQ: MDCO) volatility spikes on hope for patent extension and 7/25 EPS.

• MDCO is a developer of products to improve acute hospital care and Angiomax; a treatment to clear restricted blood vessels near the heart.
  
• MDCO will announce EPS on July 25th.
  
• RBC Capital says: "It appears that an amendment to the Senate version of the pending Patent Reform Act contains language granting the USPTO discretion to accept late filings for patent extension. This gives MDCO a potential path to gaining patent extension beyond its 2010 expiration."
  
• MDCO August option implied volatility of 78 is above its 26-week average of 43 according to Track Data, suggesting larger price fluctuations.

Caterpillar (NYSE: CAT) volatility elevated after EPS of $1.24.

• CAT reported second-quarter sales and revenues of $11.3 billion and a profit of $823 million.
  
• Smith Barney says: "Overall, stock is going to get hit hard today as earnings power is back to 'believe me' story about operational performance."
  
• CAT overall option implied volatility of 30 is above its 26-week average of 25 according to Track Data, suggesting larger risk.

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

F5 Networks (NASDAQ: FFIV) -- implied volatility collapses on EPS; FFIV rallies 20%. FFIV, a provider of content switching application traffic solutions, is recently up $13.06 to $79.22. WEDB says "Q2 exceeds expectations; continued growth to come." FFIV May option implied volatility of 34 is below its 26-week average of 42 according to Track Data, suggesting decreasing price fluctuations.

Jeffries Group (NYSE: JEF) -- option implied volatility Up to 42; on speculation Risk. JEF, an investment bank engaged in financial product execution services and asset management, is recently up 08 cents to $30.19. JEF has been frequently mentioned as a takeover target. JEF call option volume of 2,194 contracts compares to put volume of 231 contracts. JEF May option implied volatility of 42 is above its 26-week average of 31 according to Track Data, suggesting larger price risks.

United Rentals (NYSE: URI) -- implied volatility & volume increases into EPS & on speculation. URI, the largest equipment rental company in the world, is recently up 96 cents to $33.69. URI will report EPS on 5/3. URI call option volume of 2,347 contracts compares to put volume of 406 contracts. URI May 35 calls are bid 75 cents above its theoretical value of 35 cents. URI May & June option implied volatility of 38 is above its 26-week average of 35 according to Track Data, suggesting slightly more risk.

Option volume leaders today are: Apple Inc. (NASDAQ: AAPL), Amazon.com Inc. (NASDAQ: AMZN) and Qualcomm Inc. ( (NASDAQ: QCOM).

Amazon.com, Inc. (NASDAQ: AMZN) May implied volatility at 43, July at 33; suggests near term Risk. AMZN is recently trading at $45.08. AMZN will report earnings on 4/24. AMZN May option implied volatility of 43 is above its 26-week average of 37 according to Track Data, suggesting larger price fluctuations.

US Steel (NYSE: X) option implied volatility Flat at 40 into EPS as X near Record High. X is recently down .93 to $107.15. X will report EPS on 4/24. X May option implied volatility of 40 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Merck (NYSE: MRK) implied volatility suggests non-directional risk into earnings and outlook. MRK will to report earnings on 4/19. MRK over all option implied volatility of 20 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Option volume leaders today are: Yahoo! Inc. (NASDAQ: YHOO), Johnson & Johnson (NYSE: JNJ) and Intel Corp. (NASDAQ: INTC).

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

The Volatility Index for S&P 500 Options (VIX) is up .14 to 13.10.

Oakley (NYSE: OO) -- implied volatility suggests flat risk as OO trades towards record high. OO, a designer, developer, manufacturer, and distributor of eye wear & accessories, has rallied sharply over the last four days. OO is recently up $1.59 to $23.16. OO has a market cap of $1.53 billion with zero long-term debt. OO reported 2006 annual revenue of $761 million. OO April option implied volatility is at 33, May at 31; near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Genentech (NASDAQ: DNA) -- option implied volatility suggests decreasing risk into 4/11 EPS. DNA is expected to report EPS of .67 cents on 4/11/07 according to Thomson Financial Network. Robert Bard says "despite DNA's tepid Q107 overall revenue guidance, we do think Avastin upside potential is strong, and may continue to drive the stock. Reiterate Outperform rating." DNA April option implied volatility of 21 below its 26-week of average of 25 according to Track Data, suggesting decreasing price fluctuations.

Option volume leaders today are: Consol Energy (NYSE: CNX), Qualcomm (NASDAQ: QCOM), Apple Inc. (NASDAQ: AAPL) and Amgen Inc. (NYSE: AMGN).

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