Options Traders Bank On SolarCity Corp (SCTY) Burning Higher

SolarCity Corp (SCTY) has surged 14% this week

Apr 6, 2016 at 2:33 PM
facebook X logo linkedin


SolarCity Corp (NASDAQ:SCTY) options are flying off the shelves today. By the numbers, 23,000 calls are on the tape -- more than doubling the expected intraday pace -- while 16,000 puts have been exchanged. From the looks of it, at least one group of options traders are gambling on short-term upside for SCTY.

Taking a closer look, the solar stock's most active option is the weekly 4/8 30-strike call. All signs point to buy-to-open activity here, meaning traders think SCTY will topple the round-number $30 level by Friday's close, when the weekly series expires.

Call buyers haven't been shy in recent months. SCTY's 50-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) checks in at 1.47. Not only does this ratio mean long calls outstrip puts, it also rests above two-thirds of all comparable ratings from the past year -- suggesting options traders have been buying to open calls over puts at an accelerated clip.

Now appears to be an opportune time to purchase premium on short-term SCTY options. The stock's Schaeffer's Volatility Scorecard (SVS) checks in at 85. In other words, the shares have tended to make outsized moves on the charts over the past year, relative to what the options market has priced in.

Speaking of outsized moves, SolarCity Corp (NASDAQ:SCTY) has jumped 3.7% to trade at $27.72. While the stock has heated up this week -- up 14.2% since last Friday's close -- it's struggled mightily longer term. In fact, since SCTY's mid-December peak at $58.87, the shares have lost over half their value. If the stock resumes this trend lower, a mass exodus among option bulls could exert even more pressure.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI