Most Active Weekly Options: Chesapeake Energy Corporation and Sunedison Inc

Option traders have blazed different paths toward energy stocks Chesapeake Energy Corporation (NYSE:CHK) and Sunedison Inc (NYSE:SUNE)

by Alex Eppstein

Published on Mar 10, 2016 at 2:47 PM
Updated on Mar 10, 2016 at 2:47 PM

The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days. Stocks 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 oil-and-gas stock Chesapeake Energy Corporation (NYSE:CHK) and solar specialist Sunedison Inc (NYSE:SUNE).

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Despite a down day for crude oil, CHK is 1.1% higher at $4.68. In terms of relative strength, the stock has outperformed the broader S&P 500 Index (SPX) by over 150 percentage points in the past four weeks. That said, the shares are running into resistance around their 30-week moving average, which hasn't been cleared on a weekly basis since June 2014.

While CHK's bullish price movement in recent weeks has merited mixed attention from analysts, option bulls have been betting on more upside. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.65 calls for every put. The corresponding call/put volume ratio ranks in the top quartile of its annual range.

In terms of weekly options, Chesapeake Energy Corporation's 3/11 5.50-strike call has seen the biggest change in open interest in the prior two weeks. Specifically, the strike has added nearly 27,000 contracts, and data at the ISE, CBOE, and PHLX indicates at least some have been bought to open.

SUNE's day isn't going quite as well as its energy counterpart's. The stock is down 5.8% at $1.81, following in the bearish post-earnings footsteps of this sector peer. This is more of the same for the solar concern, which has surrendered 64% of its value in 2016 -- and recently saw a $2.2 billion merger agreement come undone.

Understandably, option traders are bearishly aligned toward SUNE. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.83 rests just 13 percentage points from a 12-month peak. What's more, its SOIR of 0.86 outstrips 98% of all other readings from the past year.

Looking specifically at weekly options, the most popular today is the 3/11 2-strike call. Drilling down, it appears traders are selling to close these contracts ahead of tomorrow's close, when the weekly series expires.

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