Options Traders Target Sinking Sunrun Stock

The stock has shed 56% during the last three months

Deputy Editor
Jan 31, 2022 at 3:38 PM
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Solar energy concern Sunrun Inc (NASDAQ:RUN) is following the rest of the market higher today, as it attempts to come back from what's shaped up to be a pretty dismal winter. The equity lost 56% during the last three months, and on Friday, it hit a nearly two-year low of $21.42. Though a rally attempt was made in October, it ran out of steam at the $60 level, while the 20-day moving average has been applying pressure more recently.  RUN was last seen up 7.6% at $25.19, though its looking to notch its third-straight monthly loss, down 26.5% in January. 

The stock last week announced it was signing up for a new upsized $425 million recourse lending facility, which matures in January 2025, to replace its $250 million lending facility. This may have sparked the attention of the options pits, as the stock landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks on the S&P 400 (IDX) that attracted the highest weekly options volume over the last two weeks. Per White's list, 109,199 calls and 100,540 puts exchanged hands during that time period. The February 25 put was the most popular, followed by the 30 put in the same monthly series.

mao jan 31

While calls outnumbered puts during this time period, there was a bearish shift among options traders. This is per RUN's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 84% of readings from the past year, suggesting a healthier-than-usual appetite for long puts of late. 

Echoing this, the stock sports a Schaeffer's put/call open interest ratio (SOIR) of 0.95, which stands higher than 95% of readings from the past year. This implies short-term options traders were rarely more put-biased during this time period. 

Short sellers have also targeted the stock. Short interest rose 11.1% in the last two reporting periods, and now makes up 18.4% of the stock's available float, or over six days' worth of pent-up buying power, at the stock's average daily pace of trading. 

 




 
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