Schaeffer's Trading Floor Blog

Biggest Movers: First Solar, Inc., 3D Systems Corporation, and Walter Energy, Inc.

FSLR, DDD, and WLT are making big moves in Monday's trading

by 6/23/2014 2:08 PM
Stocks quoted in this article:

With quadruple-witching expiration now behind us and the last full trading week of June underway, three of today's top market movers are alternative energy concern First Solar, Inc. (NASDAQ:FSLR), 3-D printing expert 3D Systems Corporation (NYSE:DDD), and coal producer Walter Energy, Inc. (NYSE:WLT). Here's a quick roundup of how this trio of names is performing on the charts so far.

FSLR ran to a two-month peak of $71.57 earlier today, and at last check, was standing 2.7% higher at $70.75. Meanwhile, speculators are flooding both sides of the stock's options pits, with overall volume tripling what is typically seen at this time of day. Option players are showing an affinity for short-term contracts, as the security's 30-day at-the-money (ATM) implied volatility (IV) has spiked 9.8% to 44%. In fact, nine of the 10 most active options on First Solar, Inc. today are calls that expire within the next four weeks, and it appears a healthy number of contracts at these strikes have been bought to open. FSLR has advanced almost 17% in the last month alone, so it is likely some of today's long call activity is of the traditional bullish variety. However, given that more than 11% of the equity's float is sold short, it is also possible that short sellers -- hedging against more upside -- are also responsible for the elevated call volume, particularly at out-of-the-money strikes.

DDD is up 5.1% today to trade at $56.08, bringing its month-to-date climb to almost 11%. Over the last 10 trading days, 3D Systems Corporation has racked up an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.10, which ranks in the top 2% of its 12-month range. In other words, DDD calls have been bought to open over puts at a near-annual-high clip recently, and today has been no different. Call volume is currently doubling the average intraday amount, with the majority of speculators seemingly picking up short-term bullish bets; the stock's 30-day ATM IV was last seen 6.7% higher at 46.7%. Despite its recent upward trajectory, DDD remains 39.5% lower year-to-date, and short interest makes up nearly 32% of the equity's float. As such, hedging short sellers may be attributable to the recent influx of call buying.

Like DDD, WLT has been in rebound mode since the beginning of June. Today, the stock has spiked 9.3% to $6.01, and now stands an impressive 23.2% higher month-to-date. Looking back to the beginning of 2014, however, shows that the equity is still trading roughly 64% below its year-to-date flat line. Call players have taken over Walter Energy, Inc.'s options pits today, exchanging contracts at six times the expected intraday rate. Digging deeper, it looks like one trader may be gambling on a short-term ceiling for WLT, selling to open weekly 7/11 6-strike calls (and possibly buying to close weekly 6/27 and 7/3 5.50-strike calls).


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