It looks like both of these names are trading on takeover rumors. Which one would you buy? Check out below...
Each company has traded several fold the total daily average option volume in the first 2 hours.
BYD: 15,600+ options trade of which ~15,000 are calls for a 22:1 call:put ratio. Total daily average volume is just 1,180. The Stats Tab and day's biggest trades snaps are included (click to enlarge).
GAME: 15,500+ options trade of which essentially all are calls for a 87:1 call:put ratio. Total daily average volume is just 493. The Stats Tab and day's biggest trades snaps are included (click to enlarge). The Sep 5 calls are essentially everything in GAME.
BYD: The Options Tab (click to enlarge) illustrates that the Apr 10, May 10 and May 12.5 calls are trading. The volume is larger than OI on each line - these are mostly opening. The OI om the Apr 10 calls were also purchases from my analysis - this is a double down on that line. Note also the vol increase for each of the months (top of snap).
GAME: The Options Tab (click to enlarge) illustrates that the Sep 5 calls are trading size and opening.
The Skew Tab for BYD (click to enlarge) illustrates the upward bend of the front month calls (red line to the right) from the call purchases. GAME doesn't have an interesting skew as it has too few strikes.
BYD: Finally, the Charts Tab (1 year) is included (click to enlarge). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue). The yellow shaded area at the very bottom is the IV60™ vs. the HV60™ vol difference.
Notice the recent run up in price and vol. The stock price run seems catapulted by earnings (see the "E" icon on top chart).
GAME: A dffierent story here. The stock gapped down 3-1-2010 on downward revenue guidance.
It looks like both of these names are trading on takeover rumors. Which one would you buy?
This is trade analysis, not a recommendation.
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