Options Check-Up: Canadian Solar Inc., Nokia Corporation (ADR), and Sirius XM Holdings Inc.

Analyzing recent option activity for CSIQ, NOK, and SIRI

by Alex Eppstein

Published on Oct 21, 2014 at 8:07 AM
Updated on Apr 20, 2015 at 5:10 PM

Among the stocks attracting attention from options traders lately are alternative energy issue Canadian Solar Inc. (NASDAQ:CSIQ), tech concern Nokia Corporation (ADR) (NYSE:NOK), and satellite radio provider Sirius XM Holdings Inc. (NASDAQ:SIRI). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on CSIQ, NOK, and SIRI.

  • CSIQ ended Monday's session 3.3% higher at $28.62, despite another price-target cut at J.P. Morgan Securities, to $37 from $41. However, the brokerage firm also underscored its "overweight" rating on the shares. Year-to-date, Canadian Solar Inc. is down 4%, but options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been buying to open calls over puts at a rapid-fire rate in recent weeks. Specifically, the stock's 10-day call/put volume ratio across those three exchanges is 3.93, with long calls nearly quadrupling long puts. What's more, this ratio ranks higher than 80% of all other readings from the past year. Those hoping to place short-term bets on CSIQ can currently do so at a relative bargain. The equity's Schaeffer's Volatility Scorecard (SVS) of 96 indicates the shares tend to make outsized moves, relative to what the options market is pricing in.

  • NOK lost 0.6% yesterday to close at $7.89, bringing the shares deeper into the red in 2014. Not surprisingly, speculators have been relatively bearish over the past two weeks, per the stock's put/call volume ratio of 0.42, which registers in the 87th percentile of its annual range. Meanwhile, the cost of short-term Nokia Corporation (ADR) options is fairly typical at present, per the stock's Schaeffer's Volatility Index (SVI) of 41%, which ranks in the 54th annual percentile.

  • Finally, SIRI tacked on 1.8% to close at $3.33, but remains 4.6% lower year-to-date. During the previous two weeks, options traders have bought to open 0.65 put for every call at the ISE, CBOE, and PHLX -- quite a change from one month ago. The resultant put/call volume ratio checks in higher than all but 8% of similar readings taken in the last 12 months, suggesting a stronger-than-usual preference for bearish bets over bullish. Meanwhile, short-term Sirius XM Holdings Inc. options are priced at pretty typical levels. The stock's SVI of 33% is docked in the 46th percentile, looking back 52 weeks.

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