Molycorp (MCP) isn’t participating in today’s rally. The stock is off $4.53 to $11.54 on heavy volume of more than 15 million shares after the company reported an unexpected loss for the quarter and revenues also fell short of expectations. Making matters worse, the rare metals company said it is seeking to secure financing to cover expenditures because cash flow from operations was less than anticpated. The stock is reeling and options volume is running 4.5X the daily average. 22,000 calls and 32,000 puts traded so far. Deep in-the-money Aug 19 and 16 puts are the most actives and are seeing some liquidating trades. Meanwhile, it appears that some skittish investors are taking new positions in Aug 10, Sep 10 and Sep 11 puts. Vols aren’t seeing the typical post-earnings crush. Implied volatility in MCP options is moving up 14 percent to 80, as shares Greenwood Village, CO company sink to new all-time lows.
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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.