OptionsNews, the daily news program on www.onn.tv, today reported on the following companies:
Friday’s option volume for indexes and single stocks registered nearly 15 ½ million contracts, higher than the year to date average of 14 million contracts and Thursday’s volume of just over 13 million contracts. The CBOE volatility index, also known as the VIX, ended the day at 23.56, up over 26% from Thursday’s close of 18.63. We haven’t seen the VIX this high since mid-April. To give you an idea of what the increase in the VIX and the sharp-sell off in the market did to the S&P 500 options, the at-the-money straddle on Thursday for the SPY was the 141 strike, which closed at $4. However, the at-the money straddle is now down to the 137 strike on that sell-off, but the price is $4.88 due to the increase in volatility.
Lehman Brothers has announced that they will post a 2.8 billion dollar loss for the quarter, or $5.14 a share, from a gain of $489 million or 81 cents a share in the year-ago period. Total revenues less interest expense will be $700 million, down from revenue of $5.5 billion in revenue in the year-ago period. Net revenue for the second quarter reflects negative mark to market adjustments and principal trading losses, net of gains on certain debt liabilities, Lehman said. They will be raising 6 billion dollars in new capital to help offset this loss. As you will remember, we reported back on June 3rd that this was a likely scenario, with Lehman posting their first quarterly loss since they took the company public. Many analysts believe that this new capital could come in the form of convertible bonds. In this case, the long-term call options implicit with the issue tend to be at a deep discount, so you should keep your eye on their effect on the long-term volatility.
About the Options News Network:
Serving a rapidly growing segment of the investment community, The Options News Network provides daily options news and entertainment, options education, options trading ideas, options strategies and expert commentary on the options market, targeting options traders of all skill and experience levels as well as stock investors thinking about options.
Contacts:
Ed McDaries, 312-362-2548
info@onn.tv
www.onn.tv
