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Option Market Alert: NQ Mobile Inc Implied Price Swing Hits An Unsually High Level




NQ Mobile Inc (NYSE:NQ) Risk Hits An Unsually High Level

Date Published:

Risk Alert: Before we dive into any analysis we simply note that NQ Mobile Inc (NYSE:NQ) risk is elevated. We'll detail it below -- but that's the lede -- the option market is starting to flash those neon lights that signal "risk is rising" with an IV30 of 87.49% versus the IV30 of the S&P 500 at 10.71%. The annual high for NQ Mobile Inc IV30 is 119.43%.



To skip ahead of this risk alert and see if buying or selling options has been a winner in NQ Mobile Inc, you can go here: Getting serious about option trading.

PREFACE
This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for NQ Mobile Inc (NYSE:NQ) . The creator of this model is Capital Market Laboratories (CMLviz.com).


Option trading isn't about luck -- this four minute video will change your trading life forever: Option Trading and Truth

In the "Why This Matters" section at the end of this article on NQ Mobile Inc we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know. The whole concept of an "option trading expert" is vastly over complicated and we'll talk about how superior returns are earned.

But first, let's turn back to NQ and the company's risk rating:

We also take a peek at the implied vol for the Technology ETF (XLK), our broad based proxy for NQ.





SNAPSHOT SUMMARY
S&P 500 IV30     10.71%
Nasdaq 100 IV30     13.98%
XLK IV30     13.44%

NQ HV 30     35.88%
NQ Current IV30     87.49%
52 Week Low IV30     45.68%
52 Week High IV30     119.43%


The implied price swing risk as reflected by the option market has hit an unsually high level relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($2.80, $4.30) within the next 30 calendar days.

NQ OPTION MARKET IMPLIED PRICE SWING RISK
The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. NQ Mobile Inc shows an IV30 of 87.5%, which is an unsually high level for the company relative to its past.

The option market for NQ has shown an IV30 annual low of 45.7% and an annual high of 119.4%, meaning that NQ is at the 57% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.

NQ
Current IV30    
NQ
Low IV30    
NQ
High IV30   
87.5% 45.7% 119.4%

The implied stock swing risk from the option market reflects a wider range in the next 30 calendar days for NQ Mobile Inc (NYSE:NQ) than it has on on average.
Further, if we look backwards, the stock has a realized 30-day historical volatility, called the HV30, of 35.88%.




We have a situation now where not only is the IV30 elevated relative to the past, but the option market reflects the likelihood of yet more stock movement in the next 30-days than it has in the last 30-days. Let's turn to a chart to see what's going on.
 
Note how much higher the forward looking stock swing price risk for NQ Mobile Inc is priced (87.5%) compared to what happened just in the last 30-days (35.9%).

NQ Mobile Inc Risk Rating
The NQ risk rating is at 4.5, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 4.5 rating are:

The IV30 is above the annual average.
The IV30 is above 80%.
The HV30 is below the annual average.
The IV30 is above the HV30.
The stock has moved just +2.6% over the last 3-months which does indicate some depressed risk.