Kandi Technologies Group, Inc. (KNDI) Drop Sparks a Run on Options

Kandi Technologies Group Inc (KNDI) is exploring new lows, but some option traders remain hopeful

May 14, 2015 at 11:34 AM
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Electric vehicle maker Kandi Technologies Group Inc (NASDAQ:KNDI) has plummeted 15.9% to $8.88, and earlier hit $8.70 -- its lowest level since late 2013 -- though the catalyst is unclear. The Twittersphere is chatting about possible insider selling, and some are reporting issues with the KNDI website. Whatever the cause, KNDI options are flying off the shelves at a rapid-fire rate.

The stock's 30-day at-the-money implied volatility popped 14.6% to 65.3%, and KNDI options are trading at 13 times the average intraday clip. Most popular by a mile is the stock's May 9.50 call, which it appears traders are buying to open to gamble on a rebound north of $9.50 by tomorrow's close, when front-month options expire.

Prior to today, option traders were upping the bearish ante on KNDI. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.58 stands higher than 82% of all other readings from the past year.

Meanwhile, short interest accounts for roughly 20% of Kandi Technologies Group Inc's (NASDAQ:KNDI) total available float. In fact, it would take nearly 13 sessions to repurchase these pessimistic positions, at KNDI's average pace of trading. However, in light of the stock's bear gap, it's been relegated to the short-sale restricted list.


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