Most Active Options Update: Sunedison Inc and JetBlue Airways Corporation

Two mid-cap stocks attracting the attention of option traders lately are Sunedison Inc (SUNE) and JetBlue Airways Corporation (JBLU)

by Alex Eppstein

Published on Sep 8, 2015 at 11:32 AM
Updated on Jun 24, 2020 at 10:16 AM

The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Two names of notable interest lately are Sunedison Inc (NYSE:SUNE) and JetBlue Airways Corporation (NASDAQ:JBLU).

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SUNE has streaked nearly 6% higher at midday, last seen at $12.70, after the company announced a strategic partnership with J.P. Morgan Chase & Co.'s (NYSE:JPM) Asset Management-Infrastructure Investments, as well as the purchase of a 33% interest in Dominion Resources Inc.'s (NYSE:D) solar assets. This is a marked departure from SUNE's recent downtrend. Since hitting a six-year high of $33.45 on July 20, the shares have plummeted 62%.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open SUNE calls at triple the pace of puts in recent weeks. The corresponding ratio of 3.05 ranks above roughly two-thirds of all comparable readings taken in the last year. Today, in fact, buy-to-open activity may be taking place at the deep out-of-the-money (OOTM) September 17 call.

Not all of these call buyers are necessarily bullish, though. With one-third of Sunedison Inc's float sold short, it's possible short sellers are initiating these positions to hedge against an short-term recovery.

Meanwhile, JBLU is sustaining its positive momentum today, gaining 2.1% at $24.22 -- bringing its year-to-date lead near 53%. In fact, the shares are just a chip-shot from their 11-year high of $24.64, notched in mid-August.

This price action is exciting option bulls. JBLU calls are trading at twice the expected intraday clip, with what looks like buy-to-open activity transpiring at the near-the-money September 25 strike. Longer term, however, traders have tilted in a bearish direction. The stock's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.20 outstrips 78% of comparable readings from the prior 12 months. A capitulation among these skeptics could result in tailwinds.

Similar to SUNE, this option buying may involve more than meets the eye. Given JetBlue Airways Corporation's technical strength, the put buyers may actually be shareholders protecting themselves against an unexpected downturn.

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