Most Active Options: Sunedison Inc and Alibaba Group Holding Ltd

Weekly option traders have been wagering on Sunedison Inc (SUNE) and Alibaba Group Holding Ltd (BABA)

Nov 12, 2015 at 10:53 AM
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The 20 stocks listed in the table below have attracted the highest total weekly 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 notable names are solar specialist Sunedison Inc (NYSE:SUNE) and China-based e-tailer Alibaba Group Holding Ltd (NYSE:BABA).

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SUNE is extending its slide on the charts today, last seen 2% lower at $4.80 -- and earlier hit a two-year low of $4.06. In fact, the shares are bracing for their worst single-week performance in 14 years, and have given up nearly one-third of their value month-to-date, sparked by Tuesday's news that the company will reduce sales of its renewable energy assets to its "yieldcos" until market conditions improve. Amid this ice-cold price action, the stock has been on the short-sale restricted list for the past three sessions.

Today's struggles are being met with accelerated options trading. At last check, 92,000 contracts are on the tape -- six times the expected mid-morning amount. Most active is the weekly 11/13 4.50-strike call, where buy-to-open activity is detected -- a theory confirmed by International Securities Exchange (ISE) data. According to Trade-Alert, the surge in call volume may be a reaction to unconfirmed rumors that Alphabet Inc (NASDAQ:GOOGL) has taken a stake in SUNE.

Longer term, call buying has also been popular. Sunedison Inc's (NYSE:SUNE) 50-day call/put volume ratio across the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 2.65 -- in the 86th percentile of its annual range. However, given the stock's performance and high levels of short interest -- roughly one-third of its total float -- it's possible these call buyers were actually short sellers purchasing insurance against an upside breakout.

Turning to BABA, the stock is just 0.6% higher at $80.35 following yesterday's wildly successful Singles' Day. Looking more closely at the charts, the shares are attempting to muscle back atop their descending 200-day moving average, after breaching it on Wednesday on CEO Jack Ma's comments that China's anti-corruption efforts could make the upcoming year difficult.

In today's options pits, the weekly 11/13 80-strike call occupies the top spot, with possible buy-to-open activity transpiring. This would represent a change of pace for BABA, which has amassed a 50-day ISE/CBOE/PHLX put/call volume ratio of 0.65 -- higher than 82% of all other readings from the last year.

One group that's kept the faith in Alibaba Group Holding Ltd (NYSE:BABA) is analysts. Despite the stock's 23% year-to-date deficit, 16 of 19 brokerage firms have handed out a "buy" or better endorsement, with not a single "sell" rating to be found.

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