Allscripts (MDRX) gets hammered today and is down $6.86 to $9.16 on heavy volume of 45.8 million shares on earnings guidance and news of a CEO departure. One player in the options market seems to think the sell-off is overdone and bought a Dec 8 – 11 bullish risk-reversal on the stock for 10 cents, 5000X to open. 10000 of both contracts now traded, which represents 55.5 percent of the total options volume. 36K contracts traded on the stock so far. By way of comparison, typical volume at this time of day is about 350 contracts. 30-day ATM implied vols have skyrocketed 77.5 percent to 74.
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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.