Options Marked Down Before Christmas

AS THE 2006 TRADING YEAR draws to a close, many traders combing through the market are increasingly encountering puts and calls with implied volatility levels that may seem unusually attractive. But investors are advised to be cautious as they navigate the year-end market because December's well-priced options may prove to be anything but in January. Market makers routinely lower volatility ahead of three-day holiday weekends to offset "time decay," the loss of options value over time. For...