Ford Motor Company (F), First Solar, Inc. (FSLR), The GEO Group Inc (GEO) and Corrections Corp Of America (CXW) are in the post-debate spotlight
During last night's presidential debate, Republican candidate Donald Trump and Democratic nominee Hillary Clinton -- widely considered the winner -- discussed several topics, including U.S. manufacturing jobs, solar power, and the prison system. A slew of stocks are making noise as a result, including automaker
Ford Motor Company (NYSE:F), alternative energy issue
First Solar, Inc. (NASDAQ:FSLR), and prison operators
The GEO Group Inc (NYSE:GEO) and
Corrections Corp Of America (NYSE:CXW).
Ford Motor Company (NYSE:F)
The issue: Trump again
called out Ford's plan to invest $1.6 billion in Mexican production, in an effort to tear down NAFTA and demonstrate a broader shift from American to lower-cost manufacturing elsewhere. In response, Ford -- and several of its employees -- took to social media to defend itself.
F was last seen fractionally lower at $12 -- a level that's emerged as a foothold on several occasions during the past few months. From a longer-term perspective, F shares have given up nearly 15% in 2016, pressured by their 10-month moving average -- a trendline that hasn't been toppled on a monthly closing basis since mid-2015.
However, options buyers have been upping the bullish ante lately, likely betting on a bounce for F. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's
10-day call/put volume ratio of 2.29 is higher than nearly two-thirds of all other readings from the past year, pointing to a healthier-than-usual appetite for long
calls over
puts of late. Not even two weeks ago,
F put buying was approaching fever pitch.
First Solar, Inc. (NASDAQ:FSLR)
The issue: Clinton advocated
installing 500 million more solar power panels and said she wants to "build a new modern electric grid." Trump, on the other hand, jabbed at the Department of Energy's failed deal with Solyndra, which went bankrupt in 2011, calling the investment "a disaster."
FSLR and its sector peers have rocketed higher today. The stock was last seen with a 3.6% gain at $38.59, but would still need to nearly double to get within striking distance of its March highs above $74. In fact, FSLR is
fresh off a three-year low of $33.74, tagged Sept. 20, and has shed more than 20% in the third quarter so far.
Today's options traders don't seem to think the rebound has legs, with FSLR puts trading at nearly twice the average intraday pace. The top five most active positions are weekly puts expiring either this Friday or next. But regardless of the stock's downtrend in 2016, long calls have been the options of choice lately, as FSLR sports a 50-day call/put volume ratio of 2.02 -- in the 99th percentile of its annual range. However, with 18.4% of FSLR's float dedicated to short interest, some of the recent call buying could be attributable to
short sellers seeking an options hedge.
The GEO Group Inc (NYSE:GEO) and
Corrections Corp Of America (NYSE:CXW)
The issue: "I'm glad that we're ending private prisons in the federal system," Clinton said, referring to the
Department of Justice's Aug. 18 decision. "I
want to see them ended in the state system."
The aforementioned August decision to phase out contracts with private prisons
sent GEO and CXW plummeting. Today, GEO is down 3.3% at $23.81, on pace for its worst day since Aug. 30. CXW, meanwhile, has surrendered more than 7% to sit at $14.84, set for its worst day since that fateful Aug.18, and for its lowest close in roughly seven years.
While GEO options volume isn't much to write home about today, CXW puts are flying off the shelves at three times the normal intraday rate, with what appears to be buyer-driven volume at the October and November 14 puts. If so, the traders are expecting the shares to sink even deeper in the near term.
It seems recent options buyers were either betting on a recover for the duo or hedging their shorted positions. GEO's 10-day ISE/CBOE/PHLX call/put volume ratio of 7.38 indicates more than seven calls bought to open for every put during the past two weeks, while CXW's ratio of 5.36 is higher than 90% of all other readings from the past year. However, short interest on both stocks is flirting with annual-high territory, and shorted GEO shares skyrocketed by more than 275% during the past two reporting periods.
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