Ivanhoe Mines (IVN) - Stock and Vol Pop Right Now, Upside Skew Explodes to "Takeover" Like Levels
Ophir Gottlieb | Jan 16, 2012 04:30AM ET
Ivanhoe Mines Ltd. (IVN) is an international mineral exploration and development company. The Company’s principal mineral resource property is the Oyu Tolgoi Project, located in Mongolia.
This another order flow note with some awesome looking skew to go with it. First, let's look at a bit of recent history. On 12-13-2011, IVN dropped 20% (ish) on news that Rio Tinto would consider raising its stake in the firm but not a takeover bid. I got that news from an AP article via Yahoo! Finance: K12, Ivanhoe, Urban Outfitters are big movers. We can see the stock move relative to the rest of the past 6 months in the Chart at the end of this article.
Let's start wit the order flow today. IVN has traded over 30,000 contracts on total daily average option volume of just 9,681. Calls have traded on a 7.7:1 ratio to puts with the Jan 21 calls trading over 15,500 times. Those Jan calls like like substantially purchases. The Stats Tab and Day's biggest trades snapshots are included (below).
The Options Tab (below) illustrates that the Jan 21 calls are mostly opening (compare OI to trade size). We can also see that the Jan 22 calls show a large OI of 14,839. I believe that existing interest is short based on some action on 12-7-2011, where OI rose after a 1,600 lot traded @ $3.20 in a buy-write on a $3.20 x $3.40 market.
The Skew Tab snap (below) illustrates the vols by strike by month.
Get The News You Want
Here's where it gets interesting. The upside skew in IVN in Jan is super bid. Dare I say, super duper. Hmm, super duper reminds of Superbowl XIX -- Niners vs Dolphins; Niners held the high flying Dan Marino led Dolphins and receivers Mark Clayton and Mark "super" Duper down... Anybody?... No?...
I digress. The upside skew is bid, extraordinarily so in fact. That upside bend has been developing over the last month after starting out quite flat. I've included the skew for IVN as of 12-23-2011 (when Jan and Feb were also the front two months).
We can see how flat that skew "used to be." In fact, as I'm writing this article, IVN has popped an additional $0.40 (ish). The tick chart is included below.
Check out that pop right now! This feels like takeover rumor mania -- bid upside skew and a popping stock midday.
Finally, the Charts Tab (6 months) is below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20 - blue vs HV180 - pink).
We can see the abrupt drop on 12-13-2011, discussed above. IVN stock saw another flurry of selling in early Aug dropping for ~$26 to a teenager by mid/late Aug. On the vol side, we can see that even with the pop today, the implied is still trading well below the long-term historical realized vol. Let's see where this upside move and rumor-like order flow and skew lead.
This is trade analysis, not a recommendation.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.