Calls Run Hot on Surging Kandi Technologies Group, Inc. (KNDI)

Traders cheer 2014 figures from Kandi Technologies Group Inc (KNDI)

by Josh Selway

Published on Mar 16, 2015 at 10:59 AM
Updated on Jun 24, 2020 at 10:16 AM

Kandi Technologies Group Inc (NASDAQ:KNDI) is up 10% today at $14.55, after the electric automaker reported a full-year profit for 2014. The stock is just extending its recent success. Since hitting an annual low of $10.30 in mid-December, the shares have added 41.3%, and have outpaced the S&P 500 Index (SPX) by close to 21 percentage points over the past three months. Nevertheless, short-term traders have displayed a preference for puts over calls.

Looking at open interest among options expiring in the next three months shows speculators are more put-skewed than normal. Specifically, KNDI's Schaeffer's put/call open interest ratio (SOIR) sits at 0.66, which is higher than 70% of all other readings from the past year.

Over the last two weeks, though, call buying has picked up. During that time span, KNDI has amassed a call/put volume ratio of 9.78 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio falls in the 89th percentile of its annual range, meaning calls have been bought to open over puts at a breakneck pace.

However, many traders aren't believers in the security. Currently, almost 21% of Kandi Technologies Group Inc's (NASDAQ:KNDI) float is sold short, representing seven days' worth of trading, at normal daily volumes. There is potential for a short-covering rally, should the shares extend today's rally.


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