Process Nugget

I stumbled across an article from Motley Fool on MSN about a company that sells a kind of dirt that has a type of clay in it that has many marketable uses. The company is called Amcol International Corp. (ACO).

I have never heard of the company and have no opinion about it but the article was interesting enough that I read the whole thing and looked at a few things on Yahoo Finance about it. One of the things I looked at (and the point of this post) was the option chain.

I don't do a whole lot with options, personally or for clients, but a look at the premiums can give an idea how volatile the market expects the stock to be.

The bigger the premium the more volatility expected. For comparison you could use a stock like Research in Motion (RIMM) as one extreme and perhaps a low beta utility at the other extreme and compare whatever stock you are researching.

I have simplified how options pricing works for space sake, but the idea is very straightforward as to learning a little about how a stock trades. This obviously adds nothing to a fundamental analysis of a stock.