Allied Capital (ALD, news, chart, volatility) implied volatility is reaching 225 percent, up from under 80 percent yesterday, on news lender Ciena Capital, one of Allied’s portfolio company’s, filed for bankruptcy. The credit cruch has caused the value of Ciena’s assets to decline and the company cannot repay its debt. Allied guarantees Ciena’s obligations and will pay $320 million to the lenders behind the facility. Shares of Allied tanked on the news, hitting a low of $5.50 midday before bouncing back to $8.25. Shares are down $4.30, or 34.3 percent. In the options market, volume in ALD is running 17 times the usual. 6,200 puts and 2,500 calls have traded. The October 7.5 puts are the most actives, with 1,790 traded. Implied volatility is reaching all-time highs, reflecting heightened volatility expectations for shares of Allied Capital.