Thursday, November 19, 2009

VeriFone Holdings (PAY) - Vol Jump and Put Buyers

We are adding about 30 new scans to Livevol Pro very soon. One of the news ones I am testing is greatest IV30 change day over day. You can see the first few results of the scan below and why PAY got my attention (click image to enlarge).

The Company Tab shows that PAY averages ~1,200 option contracts traded a day and that nearly twice that amount has traded in the first 3 hours. The tab also shows that people are getting long premium (vol) and short deltas (click image to enlarge).

The bottom half of the Company tab confirms this; we can see the largest trades for the day are puts trading on the offer (green coloring).

Finally the Charts tab displays how the IV30TM has been increasing rapidly recently (the red line) vs the actual stock movement (the blue line is HV30TM).

There is some interesting stuff going on with PAY. I found a good article about their trouble with the SEC: click here . Sounds like some super shady stuff.

This is probably not a good thing: "The facts in the SEC's complaint alone establish that CEO Douglas Bergeron and former CFO Barry Zwarenstein received internal reports disclosing 1Q07, 2Q07 and 3Q07 gross margins that were substantially less than the guidance they provided to investors; told VeriFone's supply chain controller, Paul Periolat, and others that the preliminary results were an "unmitigated disaster."

I leave the research up to the reader, but this is an interesting possible trade.

Legal Stuff:

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