Here is a list of stocks which traded higher Monday November 9, 2009, on unusually higher volume. I will keep an eye on these stocks Tuesday to see if there is continued buying pushing the stocks higher. This method is just one of the ways I use to pick stocks to structure particular option trades. This post requires the knowledge of stock options. To learn more about the option strategies outlined in this post, risks, pricing, calculations, other strategies, and options in general, click here.

The table below shows the company, ticker, per share % increase, and volume increase (% increased compared to 50 day average). For your convenience I have ranked the stocks in order from greatest to least volume % change.

Here are the stocks added to the Zacks #1 Rank ("strong buy") List today:

• Acadia Realty Trust (AKR)
• Atlantic Tele-Network Inc (ATNI)
• Bare Escentuals Inc (BARE)
• Bancorp Rhode Island Inc (BARI)
• Cia Siderurgica Nacional SA (SID)
• Clearwater Paper Corp (CLW)
• Conexant Systems Inc (CNXT)
• Dime Community Bancshares (DCOM)
• Domtar Corp (UFS)
• Drew Industries Inc (DW)
• Duncan Energy Partners LP (DEP)
• Eaton Vance Corp (EV)
• Expedia Inc (EXPE)
• Harris Corp (HRS)
• Ingram Micro Inc (IM)
• Innospec Inc (IOSP)
• Integrated Silicon Solution Inc (ISSI)
• KLA-Tencor Corp (KLAC)
• Lancaster Colony Corp (LANC)
• MDU Resources Group Inc (MDU)
• Mellanox Technologies Ltd (MLNX)
• Merck KGaA (MKGAF)
• MicroStrategy Inc (MSTR)
• National Australia Bank Ltd (NABZY)
• Owens Corning (OC)
• Oxford Industries Inc (OXM)
• Penske Auto Group Inc (PAG)
• Perrigo Co (PRGO)
• PolyOne Corp (POL)
• STEC Inc (STEC)
• Steiner Leisure Ltd (STNR)
• Syntel Inc (SYNT)
• Tiffany & Co (TIF)
• Timberland Co (TBL)
• Travelers Cos Inc (TRV)
• Unitrin Inc (UTR)
• Universal American Corp (UAM)
• Universal Health Services Inc (UHS)
• WD-40 Co (WDFC)

Today’s tickers: ACL, VIX, FEED, ODP, NRG, NVTL, LVS & MSTR

ACL - Alcon, Inc. – Medical supplies producer, Alcon, attracted long-term bullish option traders to the May 2010 contract. Shares slipped slightly lower by 0.5% to $144.02 by noontime (EDT). It looks as though one investor financed the purchase of a call spread by selling put options. The three-legged trade involved the sale of 4,200 puts at the May 120 strike for about 4.20 apiece. Next, the investor purchased the same number of call options at the May 155 strike for 7.25 each, spread against the sale of 4,200 calls at the higher May 165 strike for 4.50 per contract. The trader receives a credit of 1.45 each on the strategy. The full credit is retained by the investor as long as shares of ACL remain higher than $120.00 through expiration in May. Additional profits accumulate if the stock surges 7.5% to surpass the breakeven point at $155.00. Maximum additional profits available to the investor amount to 10.00 per contract, attainable if shares add 15% to $165.00 ahead of expiration in May.

VIX - CBOE Vix index – With equity prices sadly wilting by noon on Friday, investors were threatening to completely reverse Thursday’s giddy 2% advance. Traders were despondent after a 0.5% drop in consumer spending last month, which soured the tone following Thursday’s stimulus-stuffed GDP gain. The fear-gauge expanded by 8% to 26.70 as a result and one large options player appears to have placed a trade suggesting that volatility will be omnipresent – at least through year-end. The investor sold 10,000 December expiration puts at the 25 strike for a 1.75 premium, while buying half as many puts in the January expiration at the same strike. If the underlying Vix index settles at expiration above a value of the 25 strike price, the puts would expire worthless. This suggests this investor sees a rocky close to the year with volatility remaining elevated. The purchase of 5,000 puts for a 1.95 premium expiring 30 days later suggests the investor sees a calmer start to next year.

FEED - AgFeed Industries, Inc. – Shares of the Chinese feed and commercial hog producing company are trading 2.5% higher today to stand at $4.73. The firm received a ‘buy’ recommendation at EVA Dimensions yesterday. Option traders took to the May 2010 contract to initiate bullish positions on the stock. It appears a ratio risk reversal was…

Microstrategy Inc. (NASDAQ: MSTR) shares have started the session with a gap-up opening and are still trading 17.7% around $86.43.
Microstrategy Inc. (MSTR) stock has spiked in early morning trades on Friday, after a bumper Q3 performance that has beaten all street expectations.
Microstrategy Inc. (MSTR), however, is already in an overbought zone, with an RSI of over 76.