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

Among the stocks attracting attention from options traders lately are solar power concern JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO), microblogging platform Twitter Inc (NYSE:TWTR), and the iShares Silver Trust (ETF) (NYSEARCA:SLV). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on JASO, TWTR, and SLV.

  • Long puts on JASO have more than quadrupled long calls during the past two weeks, resulting in a 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 4.52, which ranks the highest of all other comparable readings from the past 12 months. In other words, the recent rate of put buying, relative to call buying, is at an annual-high level. This is somewhat surprising, considering JA Solar Holdings Co., Ltd. (ADR) has jumped 23.7% from its April 11 intraday low of $9.20 to its current perch at $11.38. Nevertheless, from a volatility perspective, short-term JASO speculators are picking up contracts at a discount, as the equity's Schaeffer's Volatility Index (SVI) of 64% ranks in the bottom 15% of its annual range.

  • Meanwhile, TWTR -- which is heading into the earnings confessional after the close next Tuesday, April 29 -- has seen more calls bought to open than puts during the past 10 trading days, resulting in an ISE/CBOE/PHLX call/put volume ratio of 1.33. Those purchasing front-month options on Twitter Inc ahead of its quarterly event have been paying a pretty penny, relatively speaking, as the stock's SVI of 83% ranks higher than 65% of comparable readings from the past year. Meanwhile, on the charts, TWTR shares are staring at a 29.6% year-to-date deficit to trade at $44.82. With that being said, perhaps some of the recent call buyers were actually short sellers in disguise, hedging against a potential rebound (or post-earnings pop) -- short interest currently accounts for 11.6% of the equity's float.

  • While calls have been the options of choice on SLV for quite some time, put players have upped their presence in the stock's options pits of late, as the equity has fallen 9.6% from its March 14 intraday high of $20.92 to trade at $18.92. To be specific, SLV's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.37 ranks in the 66th annual percentile, indicating puts have been bought to open, relative to calls, at an accelerated rate during the past two weeks. Currently, SVI on the iShares Silver Trust (ETF) is sitting at 22%, just 8 percentage points from a 12-month low. In other words, front-month SLV contracts are relatively inexpensive.

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