Weekly Put Buyers Rush Canadian Solar Inc. (CSIQ)

Canadian Solar Inc.'s (NASDAQ:CSIQ) weekly 5/22 36.50-strike put is being bought to open today

May 18, 2015 at 2:35 PM
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Although call buyers have made a few appearances in Canadian Solar Inc.'s (NASDAQ:CSIQ) options pits in recent weeks, the overriding trend has been toward long puts. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.77 ranks in the 98th annual percentile.

Echoing this is CSIQ's Schaeffer's put/call open interest ratio (SOIR) of 1.55, which sits just 1 percentage point from a 52-week peak. In other words, short-term speculators have been more put-heavy toward the security just 1% of the time within the past year.

In today's trading, puts are changing hands at two times the average intraday pace. What's more, the equity's most active option is the weekly 5/22 36.50-strike put, where 1,132 contracts are on the tape. It seems safe to assume new positions are being purchased here, as traders bet on CSIQ plunging below the strike by week's end -- when the series expires.

On the charts, Canadian Solar Inc. (NASDAQ:CSIQ) is down 4.5% at $37.14, due to an apparently uninspiring investor day. From a longer-term perspective, though, CSIQ has put in a stellar performance in 2015, up 61.3%. Therefore, it's possible that some of the recent put buying -- particularly at out-of-the-money strikes -- is at the hands of shareholders protecting paper profits against an unexpected pullback.
 

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