Schaeffer's Trading Floor Blog

Options Check-Up: Tesla Motors Inc (TSLA), Google Inc, and SunPower Corporation

Analyzing recent option activity for TSLA, GOOG, and SPWR

by 3/9/2014 6:35 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are electric car manufacturer Tesla Motors Inc (NASDAQ:TSLA), Internet kingpin Google Inc (NASDAQ:GOOG), and alternative energy provider SunPower Corporation (NASDAQ:SPWR). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on TSLA, GOOG, and SPWR.

  • While long calls have outnumbered long puts on TSLA during the past 10 trading days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the resulting call/put volume ratio of 1.17 ranks in the 45th annual percentile, meaning the recent rate of call buying, relative to put buying, is actually slightly slower than usual. Now is a good time to pick up short-term contracts on Tesla Motors Inc. The stock's Schaeffer's Volatility Index (SVI) of 58% ranks in the 32nd percentile of its 12-month range, indicating these contracts are cheaper than usual right now, from a volatility point of view. Not to mention, TSLA shares have yet to slow their long-term upward trajectory, having climbed a whopping 540% year-over-year to perch at $246.21.

  • GOOG has seen an influx of bearish betting (compared to bullish) in its options pits of late, with its 10-day ISE/CBOE/PHLX put/call volume ratio of 0.95 ranking higher than 88% of comparable readings from the past year. Given that the equity's SVI of 15% ranks 6 percentage points from a 12-month low, the cost of Google Inc's short-term options is nearing annual-low levels, relatively speaking. On the charts, GOOG shares have had a fairly decent start to 2014, tacking on 8.4% to perch at $1,214.79.

  • Bears have also been increasing their presence in SPWR's options pits. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.43 ranks in the 80th annual percentile, pointing to a faster-than-usual pace of put buying, relative to call buying, during the past two weeks. This is somewhat surprising, considering the shares have climbed nearly 13% in the past month alone to trade at $34.62. Those investing in short-term options will be happy to know these contracts can be purchased at a relative bargain right now, as SunPower Corporation's SVI of 53% ranks lower than 91% of comparable readings from the past year.

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