| At 10:19 A.M., March 31st, 2008, ChartBender's Real-time IV Top 20 report identified a straddle that was cheap on a relative basis. The trade was the RMBS April 22 straddle. At that time, the trade's fair value was $3.20. From that point, the trade got cheaper still. Indeed, opportunities quickly arose to enter the trade below $3.00. ChartBender's IV Top 20 Report directs one's attention to the ideas that are likely to warrant further research, thereby saving time and helping the trader seize opportunities. What did the trader find out about RMBS upon looking closer? The stock had experienced a massive volatility breakout to the upside. The stock was trading nearly 3 standard deviations above its 50-day moving average. One might conclude that such a lofty price would either invite momentum players or aggressive sellers. Either way, the stock could be unlikely to stay where it was. A cheap straddle may offer the right opportunity for a stock that is poised to move one way or the other.
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