Implied volatility in MBIA (MBI) is moving higher after the mortgage insurance company disclosed that the New York State Department of Financial Services has not yet determined whether or not MBIA can make scheduled interest payments on notes due July 16. The stock is down 83 cents to $9.78 in active trading of 5.8 million shares, but MKM Partners is a buyer on the weakness saying, among other things, MBIA has the liquidity to make the payment. Meanwhile, options volume in MBI is running 4X the daily average. About 16,000 calls and 10,000 puts so far. July and August 10 calls are the most actives and 30-day ATM implied volatility in MBI jumped 42 percent to 73.5.
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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.