Thursday, August 1, 2013

NQ Mobile (NQ) - Volatility Exploding, Stock Exploding, Earnings Coming

NQ is trading $15.95, down 1.2% with IV30™ up 0.7%. The LIVEVOL® Pro Summary is below.


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NQ Mobile Inc. (NQ), formerly NetQin Mobile Inc., is a holding company. The Company is a global provider of mobile Internet services focusing on security, privacy and productivity. The Company is a provider of Freemium subscription services with approximately 242 million registered user accounts in over 150 countries.

This is a vol note -- a rather explosive one along side some explosive stock moves of late. All of these phenomena are in the backdrop of an earnings release 8-12-2013 (BMO), or in English, in twelve days.

Let's start with the one-year Charts Tab below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

One year ago this was a $7.82 stock, so it has seen more than a 100% rise in the last twelve months. But, as we can see in the stock chart, that's not the eye-popping part. Look at the stock rip of late. On 6-24-2013 this was a $7.38 stock. Now, just six weeks later, the stock is up more than 115%. Whoa...

And what about the volatility... yeah... what about it?... let's turn to the one-year IV30™ chart, below.

On 7-18-2013 the implied closed at 72%. Today we see it trading over 135%. So a 90% (ish) increase in thirteen calendar days. The vol rise is in coincidence with the stock rise, so I'm not buying the idea that this is simply a reflection of the earnings announcement due out in a couple of weeks. In fact, the prior high in IV30™ into an earnings announcement (before this one) was 110%. We're already 25 vol points higher (actually it's 27 vol points a I'm writing this article) with quite some time before the actual earnings date.

This is both a phenomenally high stock price and volatility level for NQ. The 52 wk low in IV30™ is 64.02%.

Finally, let's turn to the Options Tab.

Across the top we can see that Aug vol is priced to 146.56% and Sep is priced to 119.95%. The Sep number is quite elevated to the vols in the last year, not to mention Aug, which is in its own world.

This is one to watch... right now...

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