Short-Term Traders Hone In On SolarCity Corporation (SCTY)

SolarCity Corp (SCTY) is seeing heavy activity at its 55.50 strike


Published on Apr 9, 2015 at 10:45 AM
Updated on Apr 20, 2015 at 5:32 PM

SolarCity Corp (NASDAQ:SCTY) calls have been flying off the shelves in recent weeks. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's call/put volume ratio has reached an annual peak of 6.59 -- with nearly seven calls bought to open for every put.

Today, SCTY option volume is higher than usual across the board -- especially on the put side, where contracts are crossing at triple the usual intraday rate. Garnering notable attention is the 55.50 strike, where new positions are being initiated.

Specifically, it looks like traders are selling to open SCTY's weekly 4/10 55.50-strike put, a theory echoed by data from the ISE, expecting the shares to maintain their perch atop the underfoot level through tomorrow's close -- when the weekly series expires. Meanwhile, other speculators are buying to open the April 55.50 call, anticipating SCTY will extend its lead north of $55.50 by the end of next week, when front-month options expire.

Technically speaking, SolarCity Corp (NASDAQ:SCTY) has been on a hot streak. Since hitting its most recent low of $46.69 in mid-March, the stock has popped nearly 20%. Today, in fact, the shares are up nearly 3% to trade at $55.92.

Daily Chart of SCTY since March 2015

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