Takeover?
01/06 13:24 U.S. OPTIONS/Amresco vols rise on heavy volume
CHICAGO, Jan 6 (Reuters) - Implied volatility on Amresco Inc. <AMMB.O> options were trading well above 100 percent on above-average
volume on Wednesday amid speculation that the company was entertaining buyout offers, traders said.
Directors of the Dallas, Texas-based financial services company met this morning and traders speculated that the board was discussing offers.
The company declined to comment on the rumors, citing company policy, but confirmed that the board met this morning.
Options trading on the Chicago Board Options Exchange was brisk, with more than 1,200 calls changing hands compared with just 110 puts as
of 1155 CST/1755 GMT.
Implied volatility, a key component of options pricing, rose to about 115 percent for the March 12-1/2 contract, with the stock up 1-3/8 to
10-1/2.
A trader who asked not to be named said the company was said to have hired a new investment banking firm to assess the offers, which were
"north of $16 per share." Paul Foster, investment strategist and editor of 1010WallStreet.com, noted that options volatility has been buoyant in
recent months because the stock price was depressed. He added that the yearly average for options volatility was around 55 to 60 percent.
"(Volatility) has been up in the last three months because of the stock sell-off, but (options) volume is up today. It's the third highest volume in
the last month and a half, so it looks like something is going on," Foster said. |
