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Option Trends: Citigroup, Clearwire, and SunPower

Calls are the options of choice on C, CLWR, and SPWR

by 8/3/2012 2:20:07 PM
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Bullish sentiment seems to be approaching peak levels on bailed-out bank Citigroup Inc. (NYSE:C - 27.46), wireless services provider Clearwire Corporation (NASDAQ:CLWR - 1.39), and solar stock SunPower Corporation (NASDAQ:SPWR - 4.14), according to data from the major options exchanges. In recent weeks, traders have been scooping up calls on C, CLWR, and SPWR at an accelerated clip. Here's a closer look at the latest trends in the options pits for these three hot stocks.

Beginning with C, speculators on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE) have bought to open 46,891 calls during the past five days, compared to just 17,333 puts. The resulting call/put volume ratio of 2.71 confirms that bullish bets have nearly tripled their bearish counterparts over this time frame.

In fact, C now sports a 10-day call/put volume ratio of 2.21, based on cumulative buy-to-open data from the ISE, CBOE, and NASDAQ OMX PHLX (PHLX). This ratio ranks above 77% of comparable readings taken during the past year, pointing to an elevated preference for calls over puts in recent weeks.

C monthly price chartIn that same vein, the Schaeffer's put/call open interest ratio (SOIR) for C checks in at 0.84, in the 46th annual percentile. This tame reading indicates a relatively complacent attitude among short-term speculators.

Elsewhere, short interest accounts for a nearly negligible 1.8% of the security's float. In other words, very few traders are betting against C. At the stock's average daily trading volume, it would take less than two days for this slim accumulation of bearish bets to be repurchased.

This upbeat attitude toward C is a little surprising, considering the stock's 52-week decline of 24.8%. For more than a year, the stock has been guided steadily lower by double-barreled resistance at its 10-month and 20-month moving averages.

Also on call buyers' radar is CLWR, which unveiled a well-received quarterly earnings report just over a week ago. In the five sessions since that event, traders on the ISE and CBOE have bought to open 30,044 calls on CLWR -- and zero puts.

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