Traders are selling calls in Solazyme, looking to profit from
its rich option premiums.
Our tracking systems detected volume of more than 2,500 December 15
calls in the alternative-energy company, which converts plant
matter and food oils into fuel. The contracts priced for $0.40 and
$0.45, while volume was almost 65 times previous open interest in
Implied volatility in the stock is 57 percent, compared with its 42
percent realized volatility. That means the options are pricing in
a greater move than the stock has historically made. Selling calls
is a common way to take advantage of that discrepancy.
SZYM gained 9.25 percent to $10.75 yesterday after finding support
at $10. The stock has been trending lower since last July, when it
peaked above $27. It also formed a
around $16 earlier this year, which could make some chart watchers
think that resistance is taking shape.
Yesterday's call seller is now obligated to unload SZYM shares for
$15 if they close above that level on expiration. (See our
Overall option volume was quadruple the daily average in the
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