Options Check-Up: Lululemon, SolarCity, and SodaStream

Analyzing recent option activity on LULU, SCTY, and SODA

Dec 30, 2014 at 7:49 AM
facebook X logo linkedin

Among the stocks attracting attention from options traders lately are yoga apparel designer Lululemon Athletica inc. (NASDAQ:LULU), solar energy issue SolarCity Corp (NASDAQ: SCTY), and at-home carbonation specialist Sodastream International Ltd (NASDAQ:SODA). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on LULU, SCTY, and SODA.

  • LULU has had a rough year, dropping roughly 6.2% of its value year-to-date to settle at $55.38 -- despite a 1.1% gain yesterday, and outperforming the S&P 500 Index (SPX) by over 20 percentage points in the past three months. Meanwhile, sentiment in the stock's options pits is overwhelmingly bullish. Lululemon Athletica inc.'s 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.01 stands 5 percentage points away from an annual peak. Short-term options for the stock are relatively cheap at the moment, as its Schaeffer's Volatility Index (SVI) of 40% ranks in the 24th percentile of all similar readings from the past year.

  • Shares of SCTY have also underperformed in 2014, shedding roughly 1% year-to-date to sit at $56.26. However, option buyers have been purchasing calls over puts at a faster rate than usual -- SolarCity Corp's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.40 ranks in the 81st percentile of its annual range. SCTY's short-term options are available for basement prices, as its SVI of 44% ranks in the 8th percentile of all similar readings taken in 2014. Short sellers have also taken an interest in the equity; short interest accounts for over 35% of the stock's float, which would take 7.6 sessions to cover, at average trading volumes. This activity indicates that the recent affinity for long calls could be attributable to short sellers looking for a hedge.

  • SODA's year has been dismal, as the security has lost 57.5% of its value year-to-date to perch at $21.07, and notched a fresh all-time low of $19.85 on Dec. 10. Additionally, SodaStream International Ltd has underperformed the SPX by roughly 31 percentage points over the past three months. Despite a brief surge in bullish bets earlier this month, sentiment in SODA's option pits has become appropriately bearish, with its 50-day ISE/CBOE/PHLX put/call volume ratio of 1.12 ranking higher than 91% of all other similar readings taken over the past year. Short-term bets on the stock can be had for a bargain right now, as SODA's SVI of 51% is lower than 71% of all comparable metrics taken in the previous 12 months.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI