As we roll into the Memorial Day weekend, when most traders are taking a break, we should have a little less activity than usual. Stocks are just about at all-time highs for the SPX and the smattering of decent economic news is keeping a floor under stocks for now. By the end of today, we might be at all time highs but not all stocks are like that.
charts by www.Livevolpro.com
Taking a look at PowerSecure Intl. (POWR, $8.22, up $0.43) the stock was the most volatile (dark green) over a 10 period relative to the 20 day historical volatility. Over the last week, the stock was up around 7%. That move, in and of itself, did not generate the volatility. It was the over 50% drop on earnings that most premium sellers fear that drove up the HV. The biggest jump in price on the tallest spike is a Russian payment processer, QIWI.
The business for POWR was pretty good until the last quarter. They have a client base of utilities looking for systems to save energy for customers. The Green thing has been a pretty good ride and the future should be better after some management missteps recently. The reported book value for POWR is around $7.
For a speculative portfolio selling some OTM puts that get in below book value at the higher IV’s might be a good way to own some of this stock at lower prices. There are 7.50 strike price options trading on POWR. A short term jump is probably not in the cards. atg Follow Andrew on twitter @optionvol