Blogging Options: CBOE Morning Update 4.11.13

Volatility as an asset class

Microsoft (MSFT) is down $1.08 to $29.20 in the premarket after being downgraded to Sell from Neutral at Goldman Sachs. Overall option implied volatility of 20 is near its 26-week average of 21.

Costco (COST) is up $0.94 to $106.69 in the premarket after the retailer reported March revenue up 7% to $9.67B vs. $9.07B last year.  Overall option implied volatility of 17 is below its 26-week average of 18.

Pier 1 Imports (PIR) is off $1.05 to $22,29in the premarket into the home  furnishing retailer  seeing FY14 EPS $1.26-$1.31, compared to consensus $1.38. April call option implied volatility is at 45, May is at 34, June is at 32; compared to its 26-week average of 34.

Yum! Brands (YUM) is down $1.95 to $64.81 in the premarket after reporting its China division same-store sales were down 13%. Overall option implied volatility of 28 is above its 26-week average of 26.

Options expected to be active on open; MSFT FTNT COST YUM GOOG FB JCP AAPL JPM WFC

CBOE S&P 500 BuyWrite Index $BXM @ 951.34, 50-day MA is 932.96.

CBOE Volatility Index (VIX) closed at 12.36, below its 10-day moving average of 13.26, and its 50-day moving average of 13.53.

Calls with increasing volume at CBOE:
FXI 4/20/2013 37.50 39K contracts
IWM 6/22/2013 98 35K
BAC 1/17/2015 12 21K
SPY 4/20/2013 158 21K
VXX 5/18/2013 28 11K
S 5/18/2013 10 10K

S&P futures up 5 points and DJIA Futures up 9 points on signs China’s recovery may be improving.  Weekly Jobless Claims at 346k, less than mid-350’s expected is helping bulls.
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Marty Kearney

Mr. Kearney began his long association with the CBOE when he became an independent Market Maker in early 1981. Mr. Kearney traded options full time on the trading floor until 1992 and periodically thereafter until 1996. In early 1992 he became a founding partner and Registered Options Principal of a brokerage firm based in…