Schaeffer's Trading Floor Blog

Options Check-Up: Canadian Solar Inc., Cree, Inc., and QUALCOMM, Inc.

Analyzing recent option activity for CSIQ, CREE, and QCOM

by 7/11/2014 7:43 AM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are alternative energy issue Canadian Solar Inc. (NASDAQ:CSIQ), LED specialist Cree, Inc. (NASDAQ:CREE), and telecom giant QUALCOMM, Inc. (NASDAQ:QCOM). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on CSIQ, CREE, and QCOM.

  • CSIQ bucked the broad-market trend lower yesterday, finishing with a lead of 0.9% at $28.12, after taking a bounce off its 40-day moving average. This is more of the the same for the long-term technical outperformer, which has advanced over 150% year-over-year. Meanwhile, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Canadian Solar Inc. has racked up a 10-day call/put volume ratio of 3.34. This ratio ranks in the 61st percentile of its annual range, signaling a slight bullish bias among traders of late. Those looking to wager using short-term CSIQ options can do so at a relative bargain right now. Specifically, the stock's Schaeffer's Volatility Index (SVI) of 59% is lower than all but 7% of the readings recorded in the previous 12 months.

  • CREE continued to have trouble on the charts Thursday, giving back 1.4% to close at $48.92. In fact, the equity's year-to-date deficit is nearly 22%. Elsewhere, speculators have preferred long Cree, Inc. calls over puts in recent weeks, as the security's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.90 rests in the top quartile of all readings from the past year. However, some of these bullish wagers may have been at the hands of short sellers, since 10% of the stock's float is sold short (representing nearly two weeks' worth of pent-up buying power). Front-month CREE options are fairly inexpensive right now, too. The equity's SVI of 33% sits in the 13th percentile of its annual range.

  • Finally, QCOM settled yesterday off 0.4% at $80.43, but managed to avoid a close below its 40-day moving average, despite approaching the trendline out of the gate. On the options front, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.55 is higher than 65% of all other readings from the past 52 weeks, suggesting traders have picked up puts over calls at a faster-than-usual rate during the last two weeks. What's more, QUALCOMM, Inc.'s short-term options are affordable right now, based on the security's SVI of 13%, which is lower than 93% of similar readings taken in the last year.

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