Walmart Canada Deal Sparks Plug Power Inc. (PLUG) Call Buying

Plug Power Inc (NASDAQ:PLUG) shares are sharply higher on an expanded deal with Walmart Canada

by Alex Eppstein

Published on Jun 2, 2015 at 3:02 PM
Updated on Jun 24, 2020 at 10:16 AM

Plug Power Inc (NASDAQ:PLUG) is surging on an expanded contract to supply fuel cells to Walmart Canada. Specifically, the shares were up 5.2% at last check, hovering around $2.82. In the options pits, meanwhile, traders are counting on additional upside for the stock.

Diving right in, PLUG calls are changing hands at 1.6 times the usual afternoon rate. The weekly 6/5 2.50- and 3-strike calls are among the options seeing possible buy-to-open activity. In other words, these traders are looking for the shares to end this week -- when the series expires -- above the respective strikes.

By no means is today's call-buying trend unique. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open almost 35 calls for every put. The resultant call/put volume ratio of 34.61 ranks in the 96th annual percentile.

On the charts, though, Plug Power Inc (NASDAQ:PLUG) hasn't really warranted such optimism, plummeting 56.4% since its August 2014 annual high of $6.47. Therefore, it's possible some of the out-of-the-money call buyers are short sellers hedging their bets. Over 19% of PLUG's float is sold short, representing more than nine days' worth of trading, at typical volumes.

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