Implied Volatility Mover
Implied volatility in the options on Dollar General (DG) is moving higher along with the stock price. Shares are up 19 cents to $49.77 and have been ticking higher in recent days after Standard & Poor’s said it was adding DG to its popular Standard & Poor’s 500 Index after the close of trading Friday. Some investors might be hoping the stock will benefit from the so-called “index effect”, which sometimes boosts shares of a company because funds that track the S&P 500 are forced to buy the stock when a company is added to the S&P 500. The theory is that the increased buying interest will boost the stock. On the options front, total volume in DG today is about 61,000 calls and 1,200 puts. Meanwhile, 30-day implied volatility in the options on the stock is up 23.5 percent to 32.5.
Volume Signals
Dollar General (DG) options volume is running 40X the (22-day) average, with 61,000 contracts traded and call volume accounting for 98 percent of the volume.
Tiffany (TIF) options volume is 7X, the average daily, with 39,000 contracts traded and call volume representing 70 percent of the activity.
US Airways (LCC) options volume is running 2X the average daily, with 20,000 contracts traded and call volume accounting for 96 percent of the activity.
Increasing options activity is also being seen in Kohl’s (KSS), Guess (GES), and Goodyear Tire (GT).
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