Buying on bad news is tough to do but this stock looks like it has been kicked around plenty and might be a good bet. IndyMac Bancorp (NYSE: IMB) is trading under a new symbol this morning, (formerly 'NDE'), reported earnings down 34% in its most recent quarter. It also gave a pessimistic outlook for its second quarter earnings.

The housing market sucks big-time and a recovery is not in sight. It is also suffering due to guilt by association with the sub-prime lending shadow which has been cast far and wide. To make matters even more dismal I was informed by two of my brokers that the short interest in IndyMac has been building all year and now stands at approximately 35% of outstanding shares, a substantial amount. Might be time to pass the ant-acid's around the room for any queasy folks out there.

Well if the key to the stock market is to buy low and sell high, I thought I would bring IndyMac to readers' attention and share what I see as a potential opportunity. The most startling thing about the stock fundamentals and something I do not ever remember seeing before, is that at yesterday's closing price of $30.24, the trailing P/E was 6.41 and the dividend yield was 6.46% - YES THAT'S RIGHT -- the Yield is higher than the P/E ratio! That's unbelievable!

So not to be foolish I immediately started checking IMB's credit-worthiness, could it cover? Moody's, Fitch, Standard & Poors, and Dunn & Bradstreet all rate the company as stable and give it a BBB from last June through the most recent by Fitch as of April 2007. The bank started in 1985 and seems like it will be fine over the long haul.

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

Volatility Index S&P 500 Options-VIX is down 2.88 to 15.44.

Hospira-(NYSE:HSP) option implied volatility Collapses as HSP rallies on 4Q performance. Hospira, a specialty pharmaceutical and medication delivery company, is recently up $2.94 to $38.84. Bank of America says "4Q EPS beat on strong topline performance." BAMO has a 12-month price target of $42 on HSP and says "company provides 2007 guidance range above consensus." HSP March option implied volatility of 22 is below its 26-week average of 32 and an over all level of 40 from yesterday according to Track Data suggesting decreasing price fluctuations.

IndyMac Bancorp-(NYSE:NDE) April option implied volatility indicates larger Risk. IndyMac Bancorp, the 7th largest savings and loan and the 9th largest mortgage originator in the nation, is recently up .77 cents to $34.26. NDE is trading near a 2-year low on challenging times being faced by the credit-mortgage and housing operating environment. NDE April option implied volatility of 51 is above its 26-week average of 33 according to Track Data, suggesting larger risk.

Option volume leaders today were: Qualcomm (NASDAQ:QCOM), Domtar (NYSE:DTC), Weyerhaeuser (NYSE:WY) & Apple Inc. (NASDAQ:AAPL).