BofA Downgrade Casts Shadow on Solar Energy Stock

Options traders are blasting the security today

Digital Content Manager
Jan 5, 2022 at 3:09 PM
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Solar name Enphase Energy Inc (NASDAQ:ENPH) is sinking today, last seen down 10.7% at $159.27. Today's bear gap came after BofA Global Research downgraded the security to "neutral" from "buy," and slashed is price target to $187 from $297. The firm  noted that the company's analyst day affirmed concerns surrounding a slow transition from core microinverter sales, as the tech concern attempts to diversify.

Enphase Energy stock has struggled on the charts since surging to a Nov. 22, all-time high of $282.46. Earlier in the session, the stock lost support from the 260-day moving average, though the $160 marks looks like it could contain this pullback. Year-over-year, ENPH has shed 12.3%.

Options traders have been pessimistic towards Enphase Energy stock as of late. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.42 stands higher than 88% of readings from the last year, suggesting short-term options traders have rarely been more put-biased.

Drilling down to today's options activity, 10,000 calls and 10,000 puts have crossed the tape so far. Most popular by far is the weekly 1/14 145-strike put, followed by the August 125 put, with positions being opened at both.

Options look like the way to go for those wanting to weigh in on the stock's next move. This is per ENPH's Schaeffer's Volatility Index (SVI) of 54%, which stands in the 12th percentile of its 12-month range, indicating volatility expectations are unusually low right now. What's more, the stock's Schaeffer's Volatility Scorecard (SVS) ranks at 96 out of 100. This means the equity has exceeded options traders' volatility expectations over the past year.


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