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Weekly Option Traders Surround Soaring SolarCity Corp (SCTY)

SolarCity Corp (NASDAQ:SCTY) unveiled the world's most efficient rooftop solar panels

Oct 2, 2015 at 2:21 PM
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SolarCity Corp (NASDAQ:SCTY) is popping today -- up 5.3% at $45.50 -- on news the company's rooftop solar panels are the most efficient on the globe. Specifically, SCTY's rooftop panels sport a module efficiency that tops 22%, exceeding the 21.5% of former champ SunPower Corporation (NASDAQ:SPWR).

The day's positive price action has spurred a rush of call activity in the equity's options pits, with the contracts crossing at two times the average intraday pace. A number of eleventh-hour speculators are betting on this upside to continue through tonight's close, with buy-to-open activity detected at SCTY's weekly 10/2 44- and 44.50-strike calls.

Widening the sentiment scope reveals a more put-skewed bias in the security's options arena. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SCTY's 10-day put/call volume ratio of 1.87 ranks in the 84th percentile of its annual range. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent weeks.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.81. Not only does this show that put open interest nearly doubles call open interest among options set to expire in three months or less, but it sits just 10 percentage points from a 52-week peak. Simply stated, speculative traders are more put-heavy than usual toward SCTY.

In the front-month series, specifically, peak put open interest of 9,991 contracts is currently found at SCTY's in-the-money October 50 strike. According to the ISE, CBOE, and PHLX, a number of these puts were bought to open in recent months, meaning speculators have been expecting the stock to settle south of the round-number mark at the close on Friday, Oct. 16.

On the charts, SolarCity Corp (NASDAQ:SCTY) has been charting a path lower since topping out at an annual high of $63.79 in mid-May, down 28.7%. More recently, the stock breached $50 in mid-August, and has been pressured lower by its 32-day moving average in the ensuing weeks.
 

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