Options Check-Up: First Solar, Kandi Technologies, and Spirit Airlines

Analyzing recent option activity on FSLR, KNDI, and SAVE

by Griffin Kruse

Published on Dec 16, 2014 at 8:42 AM
Updated on Apr 20, 2015 at 5:32 PM

Among the stocks attracting attention from options traders lately are alternative energy concern First Solar, Inc. (NASDAQ:FSLR), China-based electric automaker Kandi Technologies Group Inc (NASDAQ:KNDI), and discount airline Spirit Airlines Incorporated (NASDAQ:SAVE). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on FSLR, KNDI, and SAVE.

  • FSLR has struggled this year, shedding nearly 24% year-to-date to settle at $41.66 on Monday, after hitting a new annual low of $41.44 earlier in the day. Unsurprisingly, sentiment in the equity's options pits is decidedly bearish. First Solar, Inc's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.80 is an annual peak, ranking higher than 100% of all similar readings taken in the past year. However, per its Schaeffer's Volatility Index (SVI) of 48% -- which is in its 36th annual percentile -- FSLR's near-term options are relatively cheap, from a volatility perspective.

  • KNDI has had an up-and-down year. Despite yesterday's 7% loss, the stock has risen more than 47% in the past 52 weeks to land at its current perch of $11.58. However, options traders are bearish on Kandi Technologies Group Inc, with its 10-day ISE/CBOE/PHLX put/call volume ratio of 1.09 ranking higher than 95% of all similar readings within the past year. Nonetheless, the stock's short-term options are inexpensive, on a volatility basis, per its SVI of 83% -- which ranks in the 27th percentile of its 52-week range.

  • Shares of SAVE have been on a tear this year, adding over 51%. More recently, though, disappointing traffic data sent the stock reeling, with SAVE closing Monday at $68.59 -- down 19.6% from its Dec. 8 high of $85.35. However, speculators have been betting on quick turnaround. Per the equity's 10-day ISE/CBOE/PHLX call/put volume ratio, 7.72 calls have been bought to open for every put. Additionally, this ratio lands in the 93rd percentile of its annual range, suggesting an increasing desire for bullish bets over bearish. Spirit Airlines Incorporated's short-term options are pricing in higher-than-usual volatility expectations, as its SVI of 47% ranks in the 65th percentile of its yearly range.

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