Wai-Yee Chen : watch those IVs for BHP and RIO

watch those IVs for BHP and RIO

Posted By :Wai-Yee Chen on:23/01/2012 11:08:00 AM

BHP, RIO, Implied volatility

Last Friday close (20 Jan 2012) for BHP of $37.48, FMG $5.19, RIO $67.53

Huge volume in trading of BHP, FMG and RIO last Friday, in decreasing order.
Of interest is the Implied Volatility (IV) of these 3 stocks which were at very low levels, even lower than the last low reached on the 5 Dec 2011 when those stocks hit resistance and reversed down from there.

On 5 Dec, BHP was at early $37 and RIO was $67 before reversing down. As IV has an inverse relationship with its underlying stock price, it's timely to watch these two for an impending turning down from here.

About Me

Wai-Yee Chen

Wai-Yee Chen is a CNBC and SKY Business Channel options presenter, author of OptionsWise and an options adviser with RBS Morgans. Wai-Yee regularly contributes to magazines, blogs and speaks with investors at conferences, seminars and lectures. Wai-Yee is an advocate of using options to “arm you and not to harm you”.

Her experience in the Australian stock market started in 1996. In 2000, Wai-Yee joined Credit Suisse First Boston as a private client adviser before moving on to RBS Morgans in 2004 in a similar role. In January of 2011, Wai-Yee had the privilege of being a co-principal of Sydney Grosvenor office, one of RBS Morgans’ 55 managed offices across Australia. She is the Derivatives Head of the Sydney Grosvenor office, operating under the Financial Services License of RBS Morgans Limited.

Having advised for 14 years in the Australian equities market and lived through some significant troughs and peaks; Wai-Yee shares her scars, learned knowledge and valuable options experiences with investors and clients through her book, lectures, articles and blogs.

Wai-Yee is a CPA, a qualified financial planner with a Masters in Applied Finance from Macquarie University and is ASX Level 2 Derivatives Accredited.

If you would like to know Wai-Yee better, you are invited to visit her website at www.optionswise.com.au. You will be able to purchase a copy of her book OptionsWise how to invest sensibly (or at major book stores), register for OptionsWise options courses and read some of her options articles.

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