Thursday, May 17, 2012

Aqumin Volatility Newsletter 05/17/2012 - $HLF

Is Herbalife going to be cut in HLF?

While most of the market teeters on the anticipation of Greek elections in mid-June, there are still events outside of the worry that are fun to watch. As I prefer to see market activity in 3D color, I thought watching the new flow product OptionVision from Aqumin and ORATS (Option Research and Technology Services) would be helpful.

Using OptionVision traders can see intraday option flow for individual equities, indexes and ETF’s. Pretty much anything ORATS already covers. Just type in the name and up pops the Relative Volume and Implied Volatility change for the name you want. Since I was all ready following HLF on the heels of the first Einhorn questions during the HLF earnings, this is a great way to keep on top of the order flow per strike. The name plunged from $70 to $41 last week and I wanted to see if I could get a hint if it was going to rally. I had a time spread pick going in TheStreet’s Option Profits once HLF hit about $42.71.

The screenshot from yesterday shows how the volume was pumping into the upside calls in May. The Option Relative Volume describes how much the current volume on a strike is spiking over the 20 day average for the front 5 months active series. Before the news hit the tape the action got kind of bubbly as you can see. Either way it provided a nice out for the time spread.

5-17-2012 10-13-37 AM

Read more from Andrew at Option Pit

No comments:

Post a Comment