MBI has a Jan call that has high time value (12%), high downside protection (13%) and high implied volitility (1.3). This means investors feel there will be a large swing in the stock in the near term but what do you look at to determine if they feel this turn will be up or down? It seems to me if call buyers are willing to bid this much premium in a stock call they feel like it will go through the roof.

<<<This means investors feel there will be a large swing in the stock in the near term but what do you look at to determine if they feel this turn will be up or down?>>>I don't think you can really look at anything specific to tell you. As a rule people seem more eager to buy options when they think are afraid, so a high IV does tend to indicate a fear of the price fallling.<<<It seems to me if call buyers are willing to bid this much premium in a stock call they feel like it will go through the roof.>>>That is not a good conclusion because to a professional options trader a put and a call are interchangeable. To understand why, you need to understand synthetic positions. For a call, a put, or a stock position you can create an equivalent synthetic position using the other two. The basic relationships are:Synthetic Long CallA long put and a long stock or future.Synthetic Long PutA long call and a short stock or future.Synthetic Long StockA short put and a long call.Synthetic Short CallA short put and a short stock or future.Synthetic Short PutA short call and a long stock or future.Synthetic Short StockA short call and a long put.---Because these relationships exist, the IV for puts and calls are almost identical. A market maker willing to pay a large premium for a call must also be willing to pay a large premium for a put.

In this case, I think the swing has nowhere to go but up... MBI sort of beaten.