Call and Put Skews – May 13, 2010



Call Skews

Here are the stocks that saw a bias toward call activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging. Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Monsanto Company (Public, NYSE:MON) sits near the middle of a longer-term trading range with peak front-month calls at the 85 strike. (Those calls expire after tomorrow's session.)

Yahoo! Inc. (Public, NASDAQ:YHOO) is once again challenging resistance near the 18 area. The most recent rejection put in a higher low so this might be a sign that demand is building but I wouldn't front-run a breakout.

Research In Motion Limited (USA) (NASDAQ: RIMM) remains in the middle of the congestion discussed last week. The February open interest configuration shows the 65 and 70 calls building as the peak strikes so that is something to keep an eye on.

Ciena Corporation (NASDAQ: CIEN) was the subject of a post last month - CIENA Corp - What to Watch in 2010 - where I talked about the need for a bounce at support. The daily chart shows what may be the first signs of that. The stock is trying to break a near-term downtrend and bouncing from the short-term lows.

call skews may 13



Put Skews Here are the stocks that saw a bias toward put activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's put volume on the ISE is at least twice as great as the call volume. It then sorts the stocks based on the put volume. Since this is buy-to-open data, this can be a good source for finding stocks where skepticism is emerging.

Contrarians may want to focus on situations where there is put activity on stocks that are still in intermediate-term uptrends. This would be a potentially encouraging sign.

put skews may 13




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