Options Radar: Herbalife Ltd., TripAdvisor Inc, and SolarCity Corp

Reviewing notable options activity on Herbalife Ltd., TripAdvisor Inc, and SolarCity Corp

by Karee Venema

Published on Nov 5, 2014 at 12:36 PM
Updated on Apr 20, 2015 at 5:32 PM

Three stocks seeing notable options activity today are nutritional supplements specialist Herbalife Ltd. (NYSE:HLF), online travel issue TripAdvisor Inc (NASDAQ:TRIP), and renewable energy firm SolarCity Corp (NASDAQ:SCTY). Here's a quick look at how speculators have been placing their bets on HLF, TRIP, and SCTY.

  • Herbalife Ltd. (NYSE:HLF) is continuing its post-earnings swoon today, down 5.4% at $41.85. Against this backdrop, the stock has been placed on the short-sale restricted (SSR) list, and put players are flocking to the equity's options pits to look for alternate ways to bet bearishly on HLF. In fact, puts are trading at four times the average intraday rate, and are outpacing calls by a nearly 4-to-1 margin. Buy-to-open activity has been detected at HLF's November 37.50 put, meaning speculators expect the stock to breach $37.50 by the close on Friday, Nov. 21, when front-month options expire. This would be a new annual low for the shares, and as such, delta on the put is docked at negative 0.25.

  • TripAdvisor Inc (NASDAQ:TRIP) tagged a new annual low of $71.05 right out of the gate, but was last seen down 13.8% at $72.22. Pressuring the shares lower is a third-quarter earnings miss and subsequent round of price-target cuts, including one from Susquehanna, which slashed its outlook by $23 to $74. With TRIP being relegated to the SSR list, put volume has popped to 11 times what's typically seen at this point in the day. Drilling down, traders appear to be selling to close their now in-the-money November 75 puts, and selling to open the weekly 11/7 70- and 71-strike puts.

  • Ahead of tonight's quarterly earnings results, SolarCity Corp (NASDAQ:SCTY) was last seen 7% lower at $53.00. The stock is now sitting in the red on a year-to-date basis, and is on pace to close south of its 10-day moving average for the first time since Oct. 17. In the options pits, calls have emerged as the contracts of choice, and are trading at four times the expected intraday amount. Most active is the stock's November 60 call, which is seeing a mix of buy- and sell-to-open activity. Meanwhile, the November 62 call has also received notable attention from call writers, who may be hoping for a plunge in implied volatility after tonight's scheduled event. For SCTY's third-quarter, Wall Street is calling for a per-share loss of $1.11.

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