Puts Run Hot on Cooling SolarCity Corporation (SCTY)

SolarCity Corp (SCTY) options traders continue to gravitate toward bearish bets

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Published on Jan 12, 2015 at 2:57 PM
Updated on Apr 20, 2015 at 5:32 PM

Energy stocks are getting pummeled this afternoon, and SolarCity Corp (NASDAQ:SCTY) is no exception. The solar stock is off 2.3% to trade at $48.48, bringing its year-to-date deficit to 9.4%. Meanwhile, short-term options traders see more downside on the way.

Taking a quick step back, puts are being exchanged at more than two times the expected intraday pace, and nearly triple the rate of calls. Digging deeper, Trade-Alert confirms that traders are buying to open SCTY's weekly 1/23 46- and 48.50-strike puts, which are the stock's most active options. In other words, these individuals anticipate the shares will breach the respective strike prices by next Friday's close, when the weekly series expires.

Today's bearish bias is typical for SolarCity Corp (NASDAQ:SCTY) options traders. The stock's 10-day put/call volume ratio of 0.79 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 82nd percentile of its annual range. What's more, SCTY's Schaeffer's put/call open interest ratio (SOIR) of 0.90 is just 19 percentage points from a 12-month high.


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