Option Bears Won't Quit on SolarCity Corporation (SCTY)

SolarCity Corp (SCTY) traders are banking on end-of-week downside

by

Published on Jan 21, 2015 at 10:34 AM
Updated on Apr 20, 2015 at 5:32 PM

SolarCity Corp (NASDAQ:SCTY) puts were once again popular yesterday. Specifically, 12,000 contracts changed hands -- more than double the expected daily amount, and nearly triple the number of calls traded.

SCTY's most popular option by a mile was the weekly 1/23 48-strike put, which saw buy-to-open activity. The buyers are banking on the shares to settle below $48 at this Friday's close, when the weekly series expires.

As alluded to earlier, put buying has been a trend in SCTY's options pits. In fact, the stock's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at an annual high of 2.12. In similar fashion, SCTY's Schaeffer's put/call open interest ratio (SOIR) of 1.11 ranks in the 100th percentile of its 52-week range.

It's no wonder skepticism is peaking on SolarCity Corp (NASDAQ:SCTY). Despite being up 2.1% today to trade at $48.79, the shares have surrendered nearly 35% of their value on a year-over-year basis.

Daily Chart of SCTY since January 2014


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