Bad news Bear? Shares of Bear Stearns remain under water after reports this morning rehashed concerns about a loss of counterparty confidence in the firm (see this morning?s comments for more. /color BSC). The most actives? The March 25 puts. gulp. Implied volatility is off the charts as investors seek some protection in put options on fear of more bad news to come. However, the stock is above $55.00 a share and, therefore, these puts are more than $30.00 out of the money. They have a mere eight days of life left and, understandably, are also seeing some selling on the view that a move below $25 a share between now and next Saturday seems somewhat unlikely.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.