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Option Clips: Facebook Inc (FB), SolarCity Corp, and JetBlue Airways

Reviewing notable options activity on Facebook Inc, SolarCity Corp, and JetBlue Airways Corporation

by 6/4/2014 2:13 PM
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Three names seeing notable option activity today amid developing news and/or unusual price action are social networking concern Facebook Inc (NASDAQ:FB), alternative energy issue SolarCity Corp (NASDAQ:SCTY), and airline JetBlue Airways Corporation (NASDAQ:JBLU). Here's a look at how today's option traders have been placing their bets on these three names.

  • Facebook Inc (NASDAQ:FB) is up 0.7% at $63.31, despite pressure from Chinese state-run media to "punish severely the pawns" of the U.S. government for cyber-spying. FB call activity is accelerated this afternoon, relative to the norm, and has more than tripled FB put volume thus far. Much of the action has transpired at two strikes: the June and July 62.50 calls. According to Trade-Alert, the strategist may be rolling his front-month calls to the back-month series, allowing more time for the stock to move higher. Elsewhere, the June 65 call has seen more than 10,000 contracts change hands, primarily at the ask price. What's more, implied volatility (IV) is trending higher at the strike, hinting at bullish buy-to-open activity.

  • SolarCity Corp (NASDAQ:SCTY) -- which will host its annual shareholder meeting later this afternoon -- is up 0.6% at $49.48, bouncing back from an early sector swoon stemming from new duties on Chinese solar imports. The stock's short-term options are in demand, as its 30-day at-the-money IV has popped 2.9% to 60.2%. Calls are outpacing puts by a more than 2-to-1 margin, and have nearly doubled the average intraday rate. Bulls are circling the security's July 55 call, where more than two-thirds of the contracts have crossed on the ask side, and volume has surpassed open interest at the strike. By purchasing the calls to open, the buyers expect SCTY to topple $55 by back-month options expiration. However, considering 22% of the equity's float is sold short, it's possible the buyers are short sellers seeking a short-term hedge.

  • Finally, JetBlue Airways Corporation (NASDAQ:JBLU) is up 2.2% at $10.27, after notching a new five-year high of $10.38 earlier in the session. The equity is on pace to close the week in double-digit territory for the first time since August 2007, and one shareholder may be locking in gains for fear of a pullback. Intraday put volume has skyrocketed to 30 times the normal pace, with nearly all of the activity at the July 10 put. Digging deeper, a block of 7,000 contracts was purchased at $0.35 apiece, and was marked "tied" to stock. If the puts are "protective," the buyer has guaranteed the least she receive for her stake -- or part of it, anyway -- is $10 per share, should JBLU descend back into single digits before July options expire.
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