Is Sunedison Inc (SUNE) Headed for Single Digits?

Sunedison Inc (NYSE:SUNE) put buyers are wagering on a descent into single-digit territory

by Alex Eppstein

Published on Sep 15, 2015 at 9:20 AM
Updated on Jun 24, 2020 at 10:16 AM

Sunedison Inc (NYSE:SUNE) had a brutal Monday, losing 6% to hit $10.60, amid a broad-market slide. This morning, however, the solar stock is up 1.9% pre-market, after CEO Ahmad Chatila bought 4,800 shares, and the company announced its first community solar program in Massachusetts. Also providing a boost is a fresh "buy" rating from BofA-Merrill Lynch, and a $18 price target. 

On the options front, many traders are counting on SUNE to resume its downtrend through front-month expiration at Friday's close. Over the past two weeks, the September 10 strike has seen the biggest increase in put open interest, with close to 2,500 positions added. Total open interest at the strike stands at nearly 9,600 contracts -- among the largest accumulations of SUNE puts.

Digging deeper, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms that 4,374 contracts have been bought to open at the September 10 put during the last month. In other words, these buyers anticipate the shares will descend into single-digit territory by the end of this week.

This negativity is hardly inexplicable. Sunedison Inc (NYSE:SUNE) has had a miserable year, losing nearly 46%. Perhaps even more astonishing, the stock has underperformed the broader S&P 500 Index (SPX) by 63.5 percentage points over the past 40 sessions.

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