Monday, June 2, 2014

Aqumin Volatility Newsletter 6/2/2014 - $BLOX

What happened to BLOX?

Stocks moved sideways again yet found a way to make a new all-time high in the SPX. Not every stock was so lucky. Take Infoblox Inc (BLOX) for instance. BLOX came up on a volume screen and spent a good part of the day in the basement. For a stock that traded near $50 this year the fall was humbling.

6-2-2014 7-55-38 AM

3D charts by OptionVision and ORATS

From a trade point of view BLOX is much more interesting down here than at $50. The earnings were a big disappointment and some of the front month IV got smoked as usual. Normally after a drubbing like this a stock sits around for a while as the market figures out what the real worth of the company is.

There is a decent amount of short-term, term structure left in BLOX in the Jun and Jul cycle. A trade could be made there as the players sort out the next move.

The BLOX 15 straddle swaps in the Jun/ Jul cycle look ok. The stock is probably a little over sold and if you hate it move to the 12.5 swaps.

OptionVision™ – data from ORATS

Read more from Andrew at Option Pit

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