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A123 Systems Bears Opt for Puts Amid Short-Selling Restriction

Front-month puts were the options of choice on free-falling AONE shares

by 6/29/2012 10:13 AM
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Apparently, it takes more than a short-selling restriction to keep the bears away from A123 Systems, Inc. (NASDAQ:AONE - 1.27). Put volume on the battery stock spiked to nine times the norm on Thursday, with 9,566 of these bearishly oriented options crossing the tape. On the other hand, only 2,530 calls were exchanged.

The most active strike was AONE's July 2 put, where 4,107 contracts changed hands. Several large blocks traded at the ask price, indicating that buyers were responsible for the bulk of the volume. Open interest on the July 2 put rose overnight by 3,301 contracts, confirming the addition of new bearish bets at this strike. The day's flurry of put activity coincided with a 12.9% slide for AONE, as the stock widened its 52-week loss to 74.6%.

However, Thursday's pessimistic bias wasn't exactly a change of pace for the equity, as plenty of skeptics are betting on the shares to slide even closer to theoretical support at zero. AONE's Schaeffer's put/call open interest ratio (SOIR) of 1.14 registers in the 89th annual percentile, just 11 percentage points from a bearish peak. Meanwhile, a whopping 23.4% of the stock's float is dedicated to short interest.

In today's session, AONE is off 5.9% to trade at $1.27.


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