Elizabeth Harrow (eharrow@sir-inc.com) Evergreen Solar, Inc. (ESLR) has been bombarded by call players today, with volume rising to nine times the usual level. So far, nearly 1,300 calls have changed hands on the solar stock, compared to just 122 puts. The center of attention is ESLR's January 2012 1-strike call, where 1,063 contracts have crossed the tape -- 58% at the ask price, indicating they were purchased.
However, it's important to note that these aren't necessarily bullish bets on ESLR. With the stock trading near $0.59, these long-term calls are out of the money by a significant margin. Plus, a hefty 9.8% of ESLR's float is dedicated to short interest -- which raises the possibility that traders are buying calls in order to hedge their bearish bets.
Indeed, the stock's price action doesn't seem likely to inspire bullish speculation. ESLR has shed more than 60% in 2010, and the shares are down more than 2% this afternoon. Earlier, ESLR tumbled to a new annual low of $0.54, extending a recent slide beneath pressure at its 10-day and 20-day moving averages.
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