call value rockets, but low volume compared to OI

L

loufah

Sorry for the clumsy title.

CECO is up 20% today; it's a bit above $35 now. The May 30 calls are up $4.25 to $5.30.

What's surprising to me is that the volume on those calls is relatively low. OI is 3913, but volume today is only 344. The volume on the 35 calls (OI 1190) is 1487, 30 puts (OI 8318) is 1575, Jun 35 calls (OI 2412) is 1022. Volume on the stock is 8.5 million.

My question is, can anything be read into the fact that options that have moved up in price by 400% are barely trading? Are holders complacent and expect the price to keep going up? (I suppose they could be exercising a bunch this evening).
 
I don't know anything about this stock but your info seems a little off. First you are assuming non market makers are long those calls and bought them out of speculation, so therefore they would want to sell on the up move. This may or may not be true. Without watching the stock and options trade everyday it is hard to "read into" anything from just looking at the volume and open interest. Those two pieces of information can be useful but you need to know more. Second, no one is going to exercise those calls, there is no dividend (that I can see) so no reason to give up the Put for free.
 
Quote from loufah:

My question is, can anything be read into the fact that options that have moved up in price by 400% are barely trading? Are holders complacent and expect the price to keep going up? (I suppose they could be exercising a bunch this evening).
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I don't believe that you can determine the direction of the stock based on volume.
That opinion and 50 cts won't get you on the subway :)
 
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