Options Check-Up: Canadian Solar Inc., Pfizer Inc., Electronic Arts

Analyzing recent option activity on CSIQ, PFE, and EA

by

Published on Dec 5, 2014 at 7:39 AM
Updated on Apr 20, 2015 at 5:32 PM

Among the stocks attracting attention from options traders lately are alternative energy concern Canadian Solar Inc. (NASDAQ:CSIQ), blue chip Pfizer Inc. (NYSE:PFE), and video game concern Electronic Arts Inc. (NASDAQ:EA). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on CSIQ, PFE, and EA.

  • Despite closing 2.6% higher yesterday at $23.81, CSIQ is off more than 20% in 2014. Even with the equity's struggles, calls have been the options of choice among speculators. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Canadian Solar Inc.'s 50-day call/put volume ratio of 3.96 sits only 3 percentage points from an annual bullish peak. With a Schaeffer's Volatility Index (SVI) of 64% -- in its 27th annual percentile -- CSIQ's short-term options are on the inexpensive side, from a volatility perspective.

  • Yesterday PFE dropped 0.3% to finish at $31.67. However, since hitting an annual low of $27.51 in mid-October, the stock has tacked on 15.2%. The jump on the charts hasn't been enough to ward off option bears, though. Pfizer Inc.'s 10-day ISE/CBOE/PHLX put/call volume ratio comes in at 1.13, higher than 96% of similar readings taken in the past year. If PFE continues to climb the charts, it could see a boost as these bears begin to capitulate. According to the stock's SVI -- which, at 17%, ranks in the 38th percentile of its annual range -- the security's front-month options are relatively inexpensive, on a volatility basis.

  • EA continued its journey to new highs yesterday, gaining 1.1% to end the session at $46.49, and hitting a fresh multi-year peak of $46.98. The stock has more than doubled in value in 2014 alone. Elsewhere, though, options traders expect the equity's strong run to come to an end, per its 10-day put/call volume ratio at the ISE, CBOE, and PHLX. The reading of 1.49 sits in the bearishly skewed 87th percentile of its annual range. Electronic Arts Inc.'s short-term options are attractively priced, from a volatility perspective, as its SVI of 27% lands in its 23rd annual percentile.


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