Pre-earnings action in Earthlink (ELNK) seems bearish today. Shares are down 17 cents to $8 and the focus is on at-the-money puts. Feb 8s, which expire two days after the company reports (tomorrow morning), are the most actives. 4750 traded (55 percent Ask). Mar and Apr puts are seeing interest as well and levels of implied volatility are screaming 57 percent higher to 51.5. Total volume is 8,590 puts and 1,020 calls. Typical volume in ELNK is about 150! The stock rose 6.7 percent on 10/27 after earnings were last reported. The average daily post-earnings move over the past four quarters is 3.3. percent.
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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.