Put Traders Pile on Solar Stock After Stellar Earnings

Today, puts are running at fives times what's typically seen at this point

Deputy Editor
Feb 17, 2021 at 10:50 AM
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The shares of SolarEdge Technologies Inc (NASDAQ:SEDG) are up 0.4% at $332.70 at last check, after the alternative energy company's impressive fourth-quarter earnings beat. SolarEdge reported earnings of 98 cents per share, much higher than the 11 cents anticipated by analysts, alongside better-than-expected revenue. In response, J.P. Morgan Securities cut its price target by $1 to $386, while Credit Suisse and Susquehanna hiked up theirs to $319 and $345, respectively.

SolarEdge stock has had to fight its way into positive territory today, earlier dipping as low as $310.87. Nevertheless, the shares' 50-day moving average contained the brief foray into negative territory. Now, SEDG is looking to secure its fourth-straight daily gain. Year-over-year, the equity is up 206.2%. 

Analysts are split on SolarEdge stock. More specifically, seven of the 15 in coverage carry a "buy" or better rating, with six a "hold," and two a "strong sell." Meanwhile, the 12-month consensus price target of $284.88 coming into today is around a 14% discount to current levels. 

In the options pits, calls have been winning out. SEDG's 50-day call/put volume ratio of 1.25 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 85% of readings from the past year, showing calls being picked up a faster-than-usual rate during this time.

Today, however, options traders are showing a change in sentiment. So far, 3,123 puts have crossed the tape, in comparison to 1,955 calls, with puts running at five times what's typically seen at this point. The February 290 put is the most popular, followed by the 320 put, with both contracts expiring at the end of this week. 

Whatever the motive, the stock also looks to have been a good target for premium buyers in the past year, based on its Schaeffer's Volatility Scorecard (SVS) of 88 (out of 100). This means the shares have regularly made bigger moves than options traders were pricing in during the last 12 months.



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