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Option Clips: Tesla Motors (TSLA), SunPower Corporation, and Achillion

Reviewing notable options activity on Tesla Motors Inc, SunPower Corporation, and Achillion Pharmaceuticals, Inc.

by 6/16/2014 2:40 PM
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Three names seeing notable option activity today are electric car maker Tesla Motors Inc (NASDAQ:TSLA), solar concern SunPower Corporation (NASDAQ:SPWR), and infectious diseases expert Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). Here's a look at how today's option traders have been placing their bets on these three names.

  • Tesla Motors Inc (NASDAQ:TSLA) is up 6% at $218.75 amid reports that BMW and Nissan are interested in cooperating with the Elon Musk brainchild in order to develop a shared network of electric car chargers. As such, intraday options volume has more than doubled the average pace, and the stock's 30-day at-the-money (ATM) implied volatility (IV) is 13.8% higher at 41.6%, signaling strong demand for short-term contracts. Specifically, trading is hot at TSLA's June 210, 215, and 220 calls, where a majority of the transactions have transpired at the ask price, volume outstrips open interest, and IV is soaring -- all signs of buy-to-open activity. In other words, today's speculators anticipate TSLA will continue to run higher through the closing bell this Friday, when the aforementioned options expire.

  • SunPower Corporation (NASDAQ:SPWR) has tacked on nearly 6% to trade at $37.77 -- and earlier touched a fresh five-year high of $38.31 -- after the solar firm revealed a strategic partnership with Admirals Bank. In the options pits, call volume is soaring, with 21,000 contracts on the tape, compared to an expected intraday amount of fewer than 4,000. Also, short-term SPWR contracts are in demand, as evidenced by the stock's 30-day ATM IV, which has risen 4.1% to 46.6%. Along those lines, it appears bullish bets are being freshly minted at the June 38 call, where the majority of the roughly 2,300 contracts traded have done so at the ask, IV is trending higher, and volume has surpassed open interest. Therefore, these call buyers expect SPWR to muscle to even higher highs through the end of this week.

  • Lastly, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) has spiked by nearly 22% to $7.87, on the heels of a massive price-target hike to $22 from $6 at Maxim. Meanwhile, options volume has exploded, with trading running at about six times the average intraday pace, and the stock's 30-day ATM IV 10.8% higher at 138.6%. Most active is ACHN's July 6 put, where more than 3,500 contracts have been exchanged. The majority traded off the bid, IV is 3.3 percentage points higher, and volume tops open interest at the strike -- collectively pointing to sell-to-open activity on this deep out-of-the-money put. Stated differently, the put writers believe ACHN will maintain its perch atop $6 through July options expiration.


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