Schaeffer's Trading Floor Blog
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are alternative energy concern First Solar, Inc. (NASDAQ:FSLR), the iShares Silver Trust (ETF) (NYSEARCA:SLV), and gold miner Barrick Gold Corporation (USA) (NYSE:ABX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on FSLR, SLV, and ABX.

  • On an absolute basis, long FSLR calls have more than doubled long puts at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the past two weeks. Nevertheless, the resulting 10-day call/put volume ratio of 2.19 ranks in the 51st annual percentile, indicating the recent rate of call buying, relative to put buying, is actually normal on a historical basis. Now is an opportune time to place short-term bets on First Solar, Inc. The equity's Schaeffer's Volatility Index (SVI) of 43% ranks lower than all similar readings from the past year, demonstrating prices on these contracts are at an annual-low level, from a volatility perspective. Meanwhile, FSLR shares have advanced a whopping 22.3% over the past month to trade at $69.79.

  • SLV calls have been flying off the shelves, relative to puts, at a near-annual-high pace during the past 10 weeks. In fact, the equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 4.11 ranks 3 percentage points from a 12-month peak. SVI on iShares Silver Trust (ETF) -- which has trekked 6.4% lower over the past month to trade at $19.04 -- comes in at 23%, ranking in the bottom 16% of its annual range. In other words, the stock's short-term options are attractively priced right now, relatively speaking.

  • Despite ABX's one-month loss of 12.5% to trade at $17.83, the equity's options players have been very call-hungry in the past 10 sessions, picking up more than six calls for every put. The resulting ISE/CBOE/PHLX call/put volume ratio of 6.24 ranks higher than 90% of comparable readings from the past year, indicating the recent rate of bullish betting over bearish is a lot faster than usual. Currently, short-term options on Barrick Gold Corporation (USA) can be purchased at a relative bargain, as the stock's SVI of 32% ranks in the 19th annual percentile.

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