Implied Volatility Alert: CVS, HBI
11/05/09
CVS volume and volatility elevated; shares sell off on customer losses
CVS Caremark (CVS) closed down $7.28 to $28.87 on big client losses at its Pharmacy Benefits Management (PBM) unit.
CVS November option implied volatility is at 43, and December and January are at 38, versus its 26-week average of 32.
CVS call option volume of 98,227 contracts compares to put volume of 69,068 contracts, according to Track Data. CVS average daily volume is 9,800 contracts, according to IVolatility.
HBI December puts active on low volatility as shares rally
Hanesbrands Inc. (HBI) closed up $2.08 to $24.59.
On Nov. 4, Moody's revised its outlook on HBI to "stable" from "negative."
HBI November option implied volatility is at 38, December is at 44, and January is at 49, below its 26-week average of 56.
HBI Dec 22.50 Puts (HBIXX) have traded 31 times on transaction volume of 13,741 contracts versus its open interest of 110 contracts, according to Track Data, suggesting traders hedging for downside price movement.
Posted at 4 p.m.
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Researcher Paul Foster has 23 years of professional experience in the capital markets, investments, trading, corporate finance, arbitrage, options, and mergers and acquisitions.
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