Schaeffer's Trading Floor Blog

Clean Energy Fuels Corp (CLNE) Traders See a Short-Term Breakout

Are CLNE shorts hedging with long calls?

by 9/27/2013 11:41 AM
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Clean Energy Fuels Corp (NASDAQ:CLNE) was targeted by bullish option traders on Thursday, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Throughout the session, speculators bought to open 1,433 calls on CLNE, compared to just six puts, resulting in a single-day call/put volume ratio of 238.83.

Expanding the scope to 10 weeks reveals a similar call-skewed trend. Specifically, the stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 6.86 (up from its month-ago reading of 4.67) ranks in the 75th percentile of its annual range. In other words, calls have been bought to open over puts at an accelerated clip of late.

As such, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.64 ranks higher than 38% of similar readings taken in the past year, meaning short-term traders are more call-heavy than usual toward CLNE.

In the front-month series, traders have recently been targeting the October 14 call, and, over the past 10 sessions, have initiated more than 1,000 long positions here. Given that short interest accounts for nearly a quarter of the security's available float, a portion of this call activity may simply be short sellers picking up hedges against their bullish bets.

It's a rather advantageous time to scoop up options-related insurance on the cheap, too. CLNE's Schaeffer's Volatility Index (SVI) of 26% ranks lower than 99% of similar readings taken in the past year, suggesting the stock's short-term options are relatively inexpensive at the moment.

On the charts, CLNE has experienced some muted price action in 2013, with the shares up a slight 3.9% year-to-date. In fact, the equity has been churning in a sideways trading range between $12.20 and $13.50 since late May. More recently, the security surrendered a very short-term foothold atop its 200-day moving average -- currently located at $13.03. This psychologically significant trendline has been alternating roles between support and resistance since mid-April.

In today's session, however, Clean Energy Fuels Corp (NASDAQ:CLNE) is bucking the broad-market trend lower, and was last seen 0.7% higher to trade at $12.92.

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