The decline in implied volatility in some healthcare names is impressive today. Shares of many of the managed care and commercial insurance names are under pressure after the Supreme Court upheld Obama’s healthcare law. In WellPoint (WLP), for instance, shares are down $3.53 to $65.96 in heavy trading of more than 15 million shares. Options volume is 6X the daily average, with 47,000 calls and 25,000 puts traded on the stock. The top trade is a 10,000-lot of July 70 calls for 49 cents and above the asking price. Still, implied volatility in WLP is down 45.5 percent to 25.5 now that this important event risk has passed. HMA IV is off 44 percent to 46, AET down 4 percent to 29, and CI falling 36.5 to 25
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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.