Interesting implied volatilty spike in Focus Media (FMCN) today. Shares are drifting down 44 cents to $24.02 on typical volume of about 840K shares. Yet, options volume is 2X the daily average. 20,000 puts and 1,333 calls so far. The top trade is an Apr 20 – Jan 15 (1X2) put ratio spread, bought for a nickel, 2500X. At teh same time, Nov 21, 22, and 23 puts are actively traded and 30-day ATM implied volatility is up more than 40 percent to 45.5 and a big mover today. No news on the stock today. The company received a buyout offer of $27 per share from company founder, FountainVestors and a group of other invetors two months ago. However, it’s still not clear whether or not a transaction will be consummated. The stock saw volatility in November 2011 as well after Muddy Waters released negative research about the Chinese media company alleging misreprestation in the company’s financials.
About the Author (Author Profile)
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.