Puts are flying off the shelves on Yingli Green Energy Hold. Co. Ltd. (YGE - 2.65) in today's session. More than 3,500 puts have changed hands so far, representing 10 times the average intraday pace. On the flip side, fewer than 150 call contracts have crossed the tape -- roughly a third their expected intraday volume of 387 contracts.
Today's preference toward YGE puts is nothing new for options traders, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR). Since May 1, near-term put open interest has edged up by 32%, and now accounts for 10,634 contracts. What's more, the security's SOIR of 0.68 ranks in the 71st percentile of its annual range, suggesting that short-term speculators are more put-heavy than usual toward YGE.
Elsewhere, traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been picking up puts at a feverish clip in recent weeks. Specifically, investors have bought to open 3.55 puts for every call during the past 10 trading sessions. This ratio ranks higher than 99% of other similar readings taken in the past year, implying that puts have been bought to open over calls at a near annual-high pace.
Given YGE's dismal technical showing, it's easy to see why options players have been scooping up these bearish bets. The shares have lost 71.2% of their value over the previous 12 months. Plus, in the last 60 trading sessions, YGE has lagged the broader S&P 500 Index (SPX) by 24 percentage points, on a relative-strength basis. The stock has been shuttled lower by its 40-week moving average since breaching this trendline in May 2011.
YGE is continuing its struggle today, as the solar-power sector is getting hit following China's most recent protests over U.S. tariff implementations. In fact, the stock tagged a three-year low of $2.58 in this morning's trading. At last check, the equity was down 5.4%, to hover near $2.65.
These put players may have one eye trained on YGE's upcoming early morning turn in the earnings confessional on Wednesday, May 30. The company has missed bottom-line expectations in three of its last four showings. Wall Street forecasts a per-share loss of 21 cents for YGE's first quarter.