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Trade bets Clean Energy won't spike

By: optionMONSTER
Posted: 9/28/2010 4:09:00 AM
Referenced Stocks: CLNE

Clean Energy Fuels has never traded above $25, and one trader is betting that it will stay that way into the New Year.

CLNE optionMONSTER's tracking programs detected the sale of more than 3,300 January 25 calls for $0.20 yesterday against open interest of 1,251 contracts. Overall option volume in the alternative-fuel stock was more than twice the average level, with call selling accounting for almost all the activity.

CLNE fell 4.4 percent to $14.57 yesterday and is down 23 percent since the beginning of August. That marks a sharp contrast with the broader market over the same period and the rally seen in Chinese photovoltaic stocks such as ReneSola and Trina Solar.

The company's last earnings report on Aug. 9 beat forecasts, with its loss narrower than expected and revenue ahead of consensus. CLNE, which runs natural-gas fueling stations for vehicles, has nonetheless been targeted heavily by the bears and faced heavy short-selling pressure.

The negative sentiment is probably related to CLNE's overvaluation by most metrics, with a forward price-to-earnings ratio of 58 times and an enterprise value of more than 1,000 times EBITDA.

Traders also sold about 500 October 15 calls for $0.50 to $0.65, wagering that CLNE will remain below $15 for the next there weeks.

(Chart courtesy of tradeMONSTER)