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FFH Options


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You guys notice the weird spike in FFH implied vol in options this morning?

 

All my options we up a boatload this morning with implied vol basically going to 60%+ from 40% for about the first 15 minutes of trading.  The Jan 11 $300 calls trades 50% higher than they did yesterday.  My in-the-money Jan 11 $200 calls were up $20+ when the stock was only up $6 - $8.

 

Then, after 8:45, the implied vol came plummeting back down, and now the options are back in the range they were in yesterday.  Any possible explanation?

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FFH is the only stock I've found where the price of volatility in the LEAPs today is largely the same as back in March (slightly lower but it could be explained by time decay).  In March, FFH's volatility premium was the same as that of JNJ or KO.  It was 20% strike for at-the-money then, and would probably be so today were it not for time decay (it's 18.6% today).

 

 

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Some one with very thick fingers was trading FFH options this morning I was legging into a bull spread on a leap and sold some calls this AM 15.00 above where they should have been filled, once in a while the trading muses smile upon you. Its possible this all some sophisticated attempt at capturing some preceived option mis-pricing but from what I can see it looks like a bunch of bear spreads were put on. I still think however that the law suit against the hedgies could be a very valuable wild card. If it is a big conspiracy as suspected by some then one participant could cave but buy a bunch of options before doing so and screw all the other players and perhaps escape prosecution and liability.

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