Puts Run Hot on Cooling SolarCity Corporation (SCTY)

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

Digital Content Group

Jan 12, 2015 at 2:57 PM

SCTY

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.

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!