Schaeffer's Trading Floor Blog

Options Check-Up: Canadian Solar Inc., J.C. Penney Company, Inc., and Tibco Software Inc.

Analyzing recent option activity for CSIQ, JCP, and TIBX

by 3/18/2014 4:57 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are alternative energy concern Canadian Solar Inc. (NASDAQ:CSIQ), retail chain J.C. Penney Company, Inc. (NYSE:JCP), and enterprise software publisher Tibco Software Inc. (NASDAQ:TIBX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on CSIQ, JCP, and TIBX.

  • While CSIQ's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.57 indicates that long calls have more than doubled long puts during the past two weeks, the ratio sits in the 38th percentile of its annual range, implying the recent rate of call buying (relative to put buying) is actually slower than usual. Perhaps Canadian Solar Inc.'s post-earnings price action has influenced the way speculators are trading options, as the stock has shed 20.4% from its March 4 closing price of $43.67 to trade at $34.77. Now is an opportune time to purchase short-term options on CSIQ. The equity's Schaeffer's Volatility Index (SVI) of 69% ranks in the bottom 16% of its 12-month range, demonstrating these contracts are attractively priced right now, from a volatility perspective.

  • JCP -- up more than 37% over the past month to trade at $8.39 -- has seen an uptick in bullish betting (relative to bearish) in its options pits of late, as the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.82 ranks higher than 86% of similar readings from the past year. However, some of this call activity may have come at the hands of short sellers hedging their bearish bets against continued upside -- more than half of the equity's float is currently sold short. Regardless of motive, option traders can pick up short-term contracts on J.C. Penney Company, Inc. at a fair price right now, given that the equity's SVI of 64% ranks in the 40th annual percentile.

  • While TIBX has been gearing up for its fiscal first-quarter earnings report Thursday evening, the equity's options traders have bought to open puts over calls at a near-annual-high rate. This is evidenced by the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.88, which ranks 7 percentage points from a 12-month acme. Those looking to purchase short-term options on Tibco Software Inc. can do so at a relative bargain, as the equity's SVI of 42% ranks lower than 76% of comparable readings from the past year. On the charts, TIBX shares are down 11.6% over the past three months to trade at $21.64.

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