Markets

Trades look for A123 to power down

A123 Systems has rallied hard, but traders think it's running out of juice.

optionMONSTER's tracking programs detected the sale of more than 4,500 October 5 calls against open interest of just 107 contracts. Most of the blocks priced for $0.40, reflecting a belief that the maker of batteries for electric cars will spend the next two months below about $5.40.

AONE rose 10 percent to $4.74 in early afternoon trading and has been trading lower all year. It touched an all-time low of $2.99 earlier this month, and since then has shot up more than 50 percent.

The big news came on Aug. 11, when General Motors awarded the company a contract to supply batteries for vehicles in the future. It appears that none of the models exist yet, and the numbers of units is still unknown. It received another contract today from ALTe, a closely held company in Michigan.

Today's call selling pushed overall options volume in AONE to more than 6 times greater than average.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Options

Latest Markets Videos