Options Trading Has Surged on Rallying Penny Stock

PLUG open interest is near a 52-week high

by Josh Selway

Published on Sep 17, 2019 at 2:27 PM
Updated on Jun 24, 2020 at 10:16 AM

Plug Power Inc (NASDAQ:PLUG) announced this morning that the company is continuing its partnership with Europe's Engie to expand renewable energy services around the globe. Still, PLUG shares were last seen down 2.2% at $2.70, stalling out again in the $2.80 region that's capped previous rallies this year. This comes after a sharp bounce from the 200-day moving average last month, which has helped the stock more than double year-to-date.

plug stock sept 17

The security may have been due for a pullback anyway, since it's been running pretty hot in recent weeks. For instance, the 14-day Relative Strength Index (RSI) is 83, deep into overbought territory. Call buyers have been along for the ride, since the 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows almost 17 long calls opened for every put.

More broadly, there's notable open interest of almost 5,200 contracts at the front-month September 2.50 call, and traders have also taken interest in the September 3 call, where more than 3,700 contracts are sitting. Total open interest is 72,821, ranking in the 100th annual percentile.

Filling out the sentiment scene, short interest is still elevated, near the levels we saw back in March. On the other hand, analysts are bullish, with four of the six covering firms handing out "strong buy" recommendations on Plug Power. 


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