Pre-Earnings Bulls Stream to Canadian Solar Inc. (CSIQ)

Canadian Solar Inc. (CSIQ) will report quarterly earnings tomorrow morning

May 6, 2015 at 10:46 AM
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Alternative energy stocks are taking it on the chin today, and Canadian Solar Inc. (NASDAQ:CSIQ) is no exception. The shares were down 2.6% at last check to trade at $34.98 -- but remain 44.6% higher year-to-date. However, in the options pits, one group of traders is expressing confidence.

Diving right in, the July 37 call is seeing what looks like buy-to-open activity. By purchasing these positions, speculators anticipate CSIQ will bounce back and topple $37 by July options expiration.

Therefore, these option bulls are likely counting on an earnings beat for CSIQ, which will report bright and early tomorrow. The stock tends to swing wildly in the wake of these events, averaging a 12.9% move following the company's last eight quarterly reports -- including a 14.6% gain in early March.

Taking a step back, options traders have been growing increasingly skeptical toward CSIQ in recent weeks. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.66 outstrips 80% of comparable readings from the past year.

On a similar note, Canadian Solar Inc.'s (NASDAQ:CSIQ) Schaeffer's put/call open interest ratio (SOIR) stands at 1.14. Not only does this SOIR indicate put open interest outweighs call open interest among options expiring in three months or less, it also rests just 5 percentage points from a 52-week peak.
 

 

 

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