Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Volatility At Multi-Year Lows But FinisairTrading At Multi-Year Highs

Published 09/24/2013, 03:56 AM
Updated 07/09/2023, 06:31 AM

Finisar Corporation, (FNSR), develops and provides fiber optic subsystems and network performance test systems which enable data communications over local area networks, or LANs, and storage area networks, or SANs.

I found this stock using a real-time custom scan. This one hunts for depressed vols. I note that FNSR is in the “0th” percentile, meaning it’s at an annual low in IV30™. Further, the volatility level is in fact a multi-year low as the stock price is right at multi-year highs.

The two-year FNSR Charts Tab is included (below). The top portion is the stock price the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).
Finisair Monthly
On the stock side we can a remarkable appreciation from ~$12.50 to now over $23 or ~a 75% gain since May. If we take a broader view, we can see that the stock levels today are in the realm of multi-year highs. Well done management.

But, of course, this is a volatility note as well, so let’s turn to the two-year IV30™chart in isolation, below.
Chart 2
We can see a cascading implied from nearly 100% down to ~37% now. Another interesting way to view the implied is to look at the peaks reached into each earnings session (the blue “E” icons represent earnings dates). Note how those peaks get lower in a relatively monotonic way. We now find ourselves with a stock at multi-year highs in stock price and multi-year lows in volatility.

Finally, let's look to the Options Tab (below).
Chart 3
Across the top we can see the monthly vols are priced to 36.72%, 39.24% and 44.64% for October, November and December, respectively.

It’s the October and November time-frame that catches my eye – if a stock is up a lot, and the vol is down a lot and the market goes... Well, you get it…

Disclosure: This is trade analysis, not a recommendation.

Images provided by Livevol®




Latest comments

Risk Disclosure: 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.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.