SunEdison, Inc. (SUNE) Traders Target a Fresh Six-Year Peak

Sunedison Inc (NYSE:SUNE) hit a six-year peak earlier, and weekly call buyers are rolling the dice on more upside

May 20, 2015 at 3:02 PM
facebook twitter linkedin


Unlike its sector peer Micron Technology, Inc. (NASDAQ:MU), Sunedison Inc (NYSE:SUNE) saw its price target lifted today. Specifically, BofA-Merrill Lynch boosted its price target to $34 from $32. As such, the shares are fresh off a six-year peak of $29.53, and were last seen up 1.1% at $29.52. This isn't enough to satiate one group of option traders, though, who are calling for another notable milestone by week's end.

Drilling down, it appears as if the stock's in-the-money weekly 5/22 29-strike call is being bought to open for a volume-weighted average price (VWAP) of $0.61. If speculators are indeed initiating new long positions here, the goal is for SUNE to rally north of breakeven at $29.61 (strike plus VWAP) by this Friday's close -- when the weekly series expires. The security has not seen the north side of this breakeven mark since October 2008.

Widening the scope reveals a preference for calls over puts among options expiring in three months or less. In fact, SUNE's Schaeffer's put/call open interest ratio (SOIR) of 0.32 is docked lower than 94% of all similar readings taken in the past year. Simply stated, speculative traders have rarely been as call-heavy toward the stock as they are now.

Meanwhile, now is an opportune time to purchase premium on the equity's near-term options. In fact, Sunedison Inc's (NYSE:SUNE) Schaeffer's Volatility Index (SVI) of 37% sits below 99% of similar readings taken in the last 12 months, while its 30-day at-the-money implied volatility hit an annual low earlier. Adding it all up, it appears SUNE's short-term options are attractively priced at the moment, relatively speaking.
 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners