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How One SunEdison Inc (SUNE) Option Trader Upped the Bullish Ante

SunEdison Inc April calls were in focus on Tuesday as the stock hit a multi-year high

by 2/28/2014 10:30 AM
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Option Brief: SunEdison Inc (NYSE:SUNE) spent the beginning of 2014 trading in a tight range between $13.50 and $15. However, last week's well-received long-term outlook helped the stock break free from the upper end of this spectrum, and yesterday, SUNE tagged the $19.41 mark -- its loftiest perch in more than four years. Not surprisingly, call volume soared to six times the typical daily pace, and one speculator, in particular, upped the bullish ante on a continued run higher.

Shortly before noon on the NASDAQ OMX PHLX (PHLX), one massive block of 36,892 April 18 calls crossed the tape below the bid price for $2.01 each, pointing to seller-driven activity. Meanwhile, around the same time, a lot of 46,100 April 20 calls changed hands on the same exchange closer to the ask price for $1.22 apiece, suggesting they were bought. Open interest fell at the lower strike, and rose at the higher strike, confirming the closing and opening of positions, respectively. In other words, this speculator rolled up her bullish bet, as she eyed additional gains in the near term.

To put into perspective how quickly SUNE's rise has been this week, the block of April 18 calls was initially opened on Monday, when the stock traded in an intraday range of $16.50 to $16.94. From that day's intraday low, the equity has since powered nearly 15% higher to linger near $18.93.

Adding to the week's bullish bias was yesterday's pair of price-target hikes from Credit Suisse and Needham. With the consensus 12-month price target for SunEdison Inc (NYSE:SUNE) currently perched at $18.46 -- below present trading levels -- another analyst-induced boost could be in the cards for the stock.


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