US OPTIONS- AOL vols stabilize after profit-taking
CHICAGO, May 11 (Reuters) - Implied volatility in America
Online Inc. <AOL.N> stabilized on Tuesday following Monday's
sharp contraction when profit-takers stepped in, analysts and
traders said.
AOL options turnover stayed brisk in the May 140, 145 and
150 calls at the Chicago Board Options Exchange, where implied
vols stood at around 78 percent, down from a peak of about 90
percent on Monday, said a CBOE market maker.
Historical vol in AOL stock is about 100 percent, based on
a 20-day moving average.
"Volatility came in pretty good yesterday...and (today)
vols have continued on the steady side," said the market maker.
"There was a lot of call buying all the way down (in the
stock)...now they're getting out of calls."
"The vols came down yesterday and the options obviously are
busy," said an options strategist. "With the stock moving back
up, you're obviously going to have profit-taking and people
taking new positions."
Shares of America Online rose 10-14/16 to 139-3/16 at 1228
CDT/1728 GMT on Tuesday, buoyed by news before the opening that
Morgan Stanley analyst Mary Meeker raised her rating on AOL
shares to strong buy from outperform.
Volume in the May 140 calls was 5,005 on open interest of
19,632, with the option up 4-1/8 at 7-1/4. In the May 145
calls, turnover stood at 2,771 on open interest of 13,461 as
the option gained 2-15/16 to 5-1/8. And in the May 150 calls,
4,806 contracts traded on open interest of 39,261 as the
premium rose 2-1/4 to 3-3/4.
"With two weeks to go before expiration, I think there was
a lot of uncertainty out there about cable deals" and where AOL
would fit in, the market maker added. Now, "people are not as
afraid the stock is going to go to $50," he said.
The last trading session for May options on stock indexes
and individual equities is May 21.
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REUTERS
Rtr 16:55 05-11-99 |
