Although the stock of New Century Financial Corp., Irvine, Calif., reached a new all-time high on Nov. 10, investors are "quite pessimistic toward the equity," according to an "Option Byte" issued by Schaeffer's Investment Research, Cincinnati.Put-option volume on Nov. 10 exceeded five times the average put volume for New Century stock, Schaeffer's said. Put options outstanding on New Century outnumber calls by a ratio of over 150 to 100. "Also illustrating a large amount of pessimism is the high level of short interest on New Century," Schaeffer's said. "Total short interest represents more than 13% of the floated shares, which could easily help to power a short-covering rally." According to Yahoo, New Century reached a high of $63.60 Nov. 10, but settled down to $62.05 late in the afternoon. In related news, Piper Jaffray initiated coverage on New Century Financial, rating it "outperform."

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry