Sunedison Inc (SUNE) Takes Traders On a Wild Ride

Sunedison Inc (NYSE:SUNE) fell to an annual low earlier, but was last seen 5% higher

by Karee Venema

Published on Aug 12, 2015 at 3:09 PM
Updated on Jun 24, 2020 at 10:16 AM

It's been a volatile day of trading for Sunedison Inc (NYSE:SUNE), with the stock seeing action on both sides of breakeven. In fact, the security fell to an annual low of $11.78 earlier as China's woes spread to the broader equities market -- and was on track to notch its worst five-day decline since August 2001 -- but was last seen up 5.3% at $14.06.

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Amid this up-and-down action, the stock's 30-day at-the-money implied volatility jumped to a 52-week high of 131.5%. Meanwhile, option traders have been climbing on board at an accelerated clip, with overall volume running at three times the average intraday pace.

Most active is SUNE's September 14 call, where more than 16,200 contracts have changed hands. It seems safe to assume new positions are being purchased here for a volume-weighted average price (VWAP) of $1.74, making breakeven for today's call buyers $15.74 (strike plus VWAP).

On the put side, SUNE's August 12 and 17 strikes have garnered notable attention, with each seeing a massive block of 10,000 contracts change hands earlier. It appears one speculator may have rolled down her bearish position by buying to open the lower-strike puts and selling to close the higher-strike puts.

Widening the sentiment scope reveals put players have been active in Sunedison Inc's (NYSE:SUNE) options pits in recent weeks. At 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 0.85 ranks in the 71st annual percentile. Simply stated, puts have been bought to open over calls at a faster-than-usual pace.

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