Busy news days are driving heavy options trading on these 3 stocks
Looking at the options trading taking place today, three names jumping out due to unusual put volume are telecom concern Sprint Corp (NYSE:S), Dutch bank ING Groep NV (NYSE:ING), and solar issue JinkoSolar Holding Co., Ltd. (NYSE:JKS). Below is a breakdown of today's news and trading activity around shares of S, ING, and JKS.
T-Mobile Headlines Drive Put Trading on Sprint
The drama around the pending merger of T-Mobile and Sprint continues to play out, with traders reading reports about the former company admitting to racking up substantial bills at President Donald Trump's hotels, an "unimpressed" Department of Justice, and a just-announced merger hearing for March 12 in the House of Representatives. Sprint shares are trading down 4.2% at $6.12, set for their worst day in a month, and one trader may be betting on a breach of $6 in the weeks ahead.
Specifically, 9,900 weekly 3/29 6-strike puts were opened earlier near the ask price, hinting at potential buy-to-open activity. The size of the trade shouldn't be ignored, since the average daily put volume for Sprint is just 4,412. Unfortunately, anyone buying options today is facing a 30-day at-the-money implied volatility of 65.8%, which ranks in the 99th annual percentile, so premiums are elevated on near-term contracts.
Money Laundering Reports Spark Selling on ING Groep
The shares of ING Groep have been selling off amid reports of money laundering in European banks. The stock fell 3% yesterday, and is down another 3.5% today at $12.30, putting it on pace to close below the 20-day moving average for the first time since Jan. 3. As such, put volume is running at 10 times the expected pace, outstripping call volume 3,700 to 600.
For specific contracts, the December 12 put is most popular, though positions could be closing here, since open interest was high coming into today. Also popular is the March 12 put, where new positions are being added. Those buying to open the puts are hoping ING stock moves below the $12 mark in the coming days.
Traders Bet on Huge Losses for JKS
JinkoSolar stock is trading sharply lower for a third straight day, last seen down 8.6% at $16.87, after solar cell producer Hanwha Q Cells filed litigation accusing the company of patent infringement -- claims JinkoSolar today refuted. Still, JKS options traders are preparing for more losses, with intraday put volume running at 10 times the average pace. More than 3,000 contracts crossed today at the out-of-the-money April 12 put. Data indicates buy-to-open activity, so traders are betting on almost 29% more downside for the solar name in the weeks ahead.
Meanwhile, the sell-off in JKS stock is likely being cheered by short sellers, who control 29% of the total float. Going by average daily volumes, this equates to 9.4 days' worth of buying power.