Volatility continues in the coal names, but morning losses have been pared and some are now well off session lows. Alpha Natural Resources (ANR), which was the subject of increasing action yesterday (see 3/5 color), hit a morning low of $15.52, but is now up 3 cents to $16.38 and not far from its Oct 3 52-week low of $16.03. Options on the stock are actively traded, with 24K calls and 10K puts traded in the name so far. Weekly 17, Weekly 18, and Mar 17 calls are the most actives and implied vols in ANR options are up 15 percent to 65, as some investors appear to be calling a bottom in ANR after an 11-month 73.5 percent plunge in the shares.
Other names seeing higher volatility today include PCX, which fell to new 52-week lows early, but has since erased the losses and is up 14 cents to $6.50. Nevertheless, IV in Patriot Coal options is up 8 percent to 70. JRCC, CNX, and BTU also touched new 52-week lows amid higher levels of implied volatility today. There seems to be high anxiety in the space, but also signs of bottom-fishing, after a five-day 7.9 percent losing skid in the Market Vectors Coal ETF (KOL). The fund is down 36.9 percent from the highs seen 11 months ago.
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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.