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

Momentum names that made notable moves on Thursday and could continue to do so into Friday's session include aluminum producer Alcoa Inc (NYSE:AA), alternative energy concern Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), and software solutions provider Red Hat Inc (NYSE:RHT). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Alcoa Inc (NYSE:AA)

Alcoa -- which was recently named the Most Admired Metals Company by Fortune magazine for the third consecutive year -- has been steadily moving north over the past six months, advancing about 53% to trade at $12.06. Today, the stock climbed as far as $12.36, its highest perch in over two years. Despite its accomplishments, AA has racked up a healthy amount of short interest -- 129.3 million shares' worth, to be exact. This accounts for more than 12% of the stock's available float, which would take 6.4 days to cover, at Alcoa's average pace of trading. In today's session, call volume on AA ramped up to about two times the average daily amount. Some of this call activity -- particularly at out-of-the-money strikes -- could be the work of short sellers hedging their bearish bets against additional upside in the near term.

Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE)

Yingli jumped 12.1% today to close at $6.78, after yesterday projecting a healthy increase in panel shipments for the fourth quarter. As such, YGE options were in very high demand today, particularly on the call side, where volume spiked to more than eight times the typical daily amount. Digging deeper into the data shows that more than two-thirds of the day's total options volume transpired at the March 7 and April 7 calls. Perhaps some of this activity came at the hands of short sellers picking up options-related insurance, considering a lofty 22.1% of YGE's stock is currently sold short.

Red Hat Inc (NYSE:RHT)

Red Hat introduced its most comprehensive open source business process management suite yet Tuesday morning, allowing the shares to climb 4.4% over the past three sessions to perch at $60.86. Today, the stock surged to a fresh annual high of $61.45, while option traders targeted contracts on the call side of the aisle. In fact, calls outnumbered puts by a margin of almost 6-to-1. Today's preference for calls over puts is nothing new in RHT's options pits. Over the past 10 trading days, the equity has racked up an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 23.88, which ranks in the 92nd annual percentile. In other words, speculators have bought to open calls over puts at an accelerated pace of late.


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