Plug Power Inc. (PLUG) Gains Fuel Bullish Betting

Plug Power Inc (PLUG) will provide a business update tomorrow morning

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Published on Jan 27, 2015 at 2:32 PM
Updated on Apr 20, 2015 at 5:32 PM

Unlike what we observed earlier this month, Plug Power Inc (NASDAQ:PLUG) calls have been popular in recent weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day call/put volume ratio across those exchanges is 24.48, which outranks 93% of all similar readings from the previous year. (Though, with more than one-fifth of the stock's float sold short, some of these long calls may have been initiated by short sellers as hedges.)

Along similar lines, PLUG's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.32, with short-term call open interest more than tripling put open interest. What's more, this SOIR sits at an annual low, suggesting an extreme bias toward calls over puts, among options expiring in the next three months.

Things are shaking out similarly today, with calls running at four times the usual intraday pace, and outstripping puts by an almost 20-to-1 margin. In addition, PLUG's 30-day at-the-money implied volatility has edged 1.9% higher to 83.5%, hinting at strong demand for short-term strikes.

Looking more closely, each of the stock's 10 most active options are calls. Leading the way is the weekly 1/30 3.50-strike call, where traders are initiating long positions in the hopes of additional end-of-week upside -- ahead of Friday night expiration.

This afternoon, Plug Power Inc (NASDAQ:PLUG) has climbed nearly 5% to $3.22, and the stock has rallied roughly 30% since hitting a Jan. 16 intraday low of $2.48. Meanwhile, short-term traders have their eyes on tomorrow's business update conference call, which could provide the shares with a catalyst.


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