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Option Clips: Barnes & Noble, DISH Network, and Canadian Solar

Reviewing notable options activity on Barnes & Noble, Inc., DISH Network Corp, and Canadian Solar Inc.

by 2/21/2014 2:44 PM
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Two equities generating buzz on StockTwits today are bookseller Barnes & Noble, Inc. (NYSE:BKS) and satellite TV company DISH Network Corp (NASDAQ:DISH). Alternative energy concern Canadian Solar Inc. (NASDAQ:CSIQ), meanwhile, is also garnering unusual attention in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • After being halted for part of the session, Barnes & Noble, Inc. (NYSE:BKS) is up 7% at $17.95. Traders are weighing an offer from G Asset Management, LLC, in which the private investment management firm would purchase either 51% of the Nook unit for $5 per share, or 51% of BKS for $22 per share. Total option volume is running at eight times the norm, and the stock's 30-day at-the-money implied volatility has rocketed 4.2% higher to 68.1%, underscoring the escalating demand for short-term options. While four of the 10 most active options consist of February-dated calls -- which expire in less than two hours -- it appears some speculators are exploiting elevated options premiums to place neutral-to-bullish bets. Specifically, a few traders are selling to open the March 17 put, on hopes that BKS remains north of $17 throughout the next four weeks.

  • DISH Network Corp (NASDAQ:DISH) notched a near-14-year high of $59.95 today, but has since trimmed its lead to 2.4% to trade at $58.46. The company this morning reported stronger-than-expected fourth-quarter earnings, and Chairman Charlie Ergen today said the company wouldn't go against Softbank in a potential bid for T-Mobile US Inc (NYSE:TMUS). DISH options are trading at about four times the norm, driven by volume on the call side. About 22,000 calls have changed hands thus far -- five times the average -- compared to fewer than 4,300 puts. Digging deeper, some speculators are rolling the dice on even higher highs for DISH, buying to open the out-of-the-money September 62.50 calls.

  • Finally, Canadian Solar Inc. (NASDAQ:CSIQ) is 6% lower at $36.92, and puts are crossing the tape at seven times the normal pace. Ahead of the company's turn in the earnings confessional on Wednesday, March 5, one trader is taking a cautiously bearish approach, implementing a long put spread at the March 31 and 37 puts. Specifically, the investor bought to open the 37-strike puts, and simultaneously sold an equal amount of 31-strike puts, for a net debit of $2.20 per pair of contracts -- which represents the maximum risk on the trade. The goal is for CSIQ to retreat beneath $34.80 (bought put strike minus net debit) within the options' lifetime, though the sale of the 31-strike puts limits the trader's maximum reward to $3.80 (difference between strikes, minus net debit) per pair of contracts, no matter how far CSIQ should sink south of $31.


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