Traders Hungry for Short-Term Canadian Solar Inc. (CSIQ) Options

Traders are gambling on Canadian Solar Inc.'s (CSIQ) end-of-week trajectory

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Published on Mar 23, 2015 at 3:02 PM
Updated on Apr 20, 2015 at 5:32 PM

Option skeptics have taken a shine to Canadian Solar Inc. (NASDAQ:CSIQ) in recent weeks. The alternative energy stock's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.05 -- in the 94th percentile of its annual range.

However, it's possible some of these long puts have been initiated by shareholders seeking a downside hedge. After all, CSIQ has outperformed the broader S&P 500 Index (SPX) by 76 percentage points over the last 40 sessions, boosted by a recent earnings beat.

In today's options pits, calls are the contracts of choice, and are crossing the tape at 1.2 times the expected intraday amount, and outstripping puts 3,691 contracts to 2,394. Specifically, CSIQ's most active option is the weekly 3/27 36-strike call, with data from Trade-Alert hinting at a mix of buy- and sell-to-open activity. For those initiating long calls, these speculators expect the underlying -- which is up 3% at $35.90 -- to topple $36 by Friday's close, when the weekly series expires. For those writing the calls to open, the goal is for CSIQ to settle the week south of $36.

Meanwhile, it looks like another group of traders is selling to open the weekly 3/27 35-strike put. In so doing, these bettors anticipate Canadian Solar Inc. (NASDAQ:CSIQ) will maintain its perch atop $35 through the end of the week.


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