Stocks quoted in this article:
Clean Energy Fuels Corp (NASDAQ:CLNE) is trading more than 5% higher today, amid declining natural gas prices, and the positive price action isn't being lost on option traders. Around 6,400 calls have crossed the tape so far, or nearly seven times the average intraday volume. As a point of comparison, just over 700 puts have changed hands. Speculators are targeting calls in the May series of options, hoping today's upward momentum continues in the near term.
Jumping right in... The May 12 call has seen 2,365 contracts trade, mostly at the ask price. Implied volatility has surged 9.9 percentage points, and volume is outstripping open interest, pointing to buy-to-open activity. These in-the-money puts are being purchased for a volume-weighted average price (VWAP) of $0.96, meaning traders will profit with each step above $12.96 (strike price plus the VWAP) CLNE takes through the close on May 17 -- when front-month options expire. This breakeven mark is just a hair's breadth from the stock's current perch at $12.95.
Meanwhile, CLNE's May 13 call is also on investors' radar, where 1,801 contracts have traded for a VWAP of $0.48. Implied volatility has ticked higher at here, as well, and data from the International Securities Exchange (ISE) confirms that a number of these positions have been bought to open. These near-the-money calls will become profitable should Clean Energy Fuels Corp surpass the $13.48 mark over the next four weeks.
Today's campaign for calls contradicts the withstanding sentiment in the stock's options pits, as evidenced by data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the equity's 10-day put/call volume ratio of 0.28 ranks higher than 76% of similar readings taken in the past year. Simply stated, puts have been bought to open over calls at an accelerated clip in recent months.
Echoing this bearishly skewed bias is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.76, which ranks in the 62nd percentile of its annual range. In other words, near-term traders are more put-heavy than usual toward CLNE.
On the charts, Clean Energy Fuels Corp (NASDAQ:CLNE) has been a long-term laggard. For starters, the stock is sitting on a dreary 28% year-over-year deficit. Additionally, CLNE has underperformed the broader S&P 500 Index (SPX) by more than 10 percentage points throughout the past 60 sessions. The equity's most recent attempt at technical redemption was quickly rejected by its 60-week moving average -- a trendline that has served as a resistance since July.