Schaeffer's Trading Floor Blog

Options Check-Up: BlackBerry Ltd (BBRY), Micron Technology, Inc., and SolarCity Corp

Analyzing recent option activity for BBRY, MU, and SCTY

by 2/23/2014 2:19 PM
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Among the equities attracting attention from options traders lately are smartphone maker BlackBerry Ltd (NASDAQ:BBRY), semiconductor concern Micron Technology, Inc. (NASDAQ:MU), and alternative energy issue SolarCity Corp (NASDAQ:SCTY). Below, we'll look at how options buyers are betting on BBRY, MU, and SCTY, and how much they are willing to pay to do so.

  • BlackBerry Ltd (NASDAQ:BBRY) finished the week 1.8% higher at $9.14, and has outperformed the broader S&P 500 Index (SPX) by 47 percentage points during the past three months. Against this backdrop, option bulls are coming out of the woodwork, as evidenced by the stock's 10-day call/put volume ratio of 4.63 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio not only indicates that traders have bought to open more than four BBRY calls for every put in recent weeks, it also stands at an annual high, suggesting speculators haven't favored long calls relative to puts by a wider margin during the past year.

  • Micron Technology, Inc. (NASDAQ:MU) has more than tripled over the past year, touching a near-12-year high of $25.68 on Wednesday before settling the week at $25.08. Nevertheless, skepticism abounds in the options arena. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.72 registers in the 86th percentile of its annual range, implying that short-term options players are more put-biased than usual right now. Plus, the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.54 sits just 5 percentage points from a 12-month peak. Currently, MU's short-term contracts are attractively priced, from a historical standpoint; the equity's Schaeffer's Volatility Index (SVI) of 35% is just 4 percentage points from an annual low.

  • SolarCity Corp (NASDAQ:SCTY) -- which settled at $75.86 on Friday -- will step up to the earnings plate after the close on Monday. Ahead of the event, put options are gaining popularity on the long side. The equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.50 stands higher than 76% of all other readings from the past year, suggesting speculators have purchased SCTY puts over calls at an accelerated clip during the past two weeks. Technically speaking, SCTY has roughly quadrupled over the last year, outperformed the SPX by 59 percentage points during the past three months, and notched a record high of $79.99 on Tuesday.

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