Actionable news
0
All posts from Actionable news
Actionable news in FSLR: First Solar, Inc.,

Three Stocks That Have Recently Seen Unusual Activity In Their Options

I frequently check unusual options to see what tail trade I can get myself on. Here is what the most recent data from Yahoo Finance looks like:

Let us examine the three selected stocks with external tools. As you can see, the three selected stocks are First Solar (FSLR), Texas Instruments (TXN), and VanEck Vectors Russia ETF (RSX). I specifically chose these stocks because their options have shown unusually high volume coupled with a relative small options market around them (on contrary, major ETFs get high volumes in their options quite frequently, so there is nothing special about that). The table is valid as of August 10, 2016.

(1) First Solar

First Solar's stock has seen a dramatic decline in its price over the last month:

The trade above shows that over 28k $40 calls expiring by the end of next week were traded on the market. It was not immediately clear whether this was a purchase or a disposal. So I looked at extra data:

(Source: TD Waterhouse)
(Source: optionistics.com)

The charts above show that the implied volatility of the calls went north on the day of the transaction (from about 40% to over 50%). I therefore think that the increase is associated with the fact that the trade was actually a purchase (i.e. market makers priced in more IV as they were selling the options). The question remains whether this was an...


More