Will SunEdison keep on shining?
SunEdison spiked higher yesterday on news that it would spin off its semiconductor business, and one large investor is looking for even more gains.
optionMONSTER's Heat Seeker system detected the sale of 5,000 January 7 calls for $1.85 and the purchase of 5,000 January 9 calls for $0.98 yesterday. Volume was below previous open interest in the lower strike but above it in the higher contracts.
This indicates that a trader is closing the January 7 contracts and rolling the position $2 higher, taking some profits off the table in the process. The new long calls are looking for SUNE to rally above $9 by early next year, but they could expire worthless if shares remain below that level. (See our Education section)
SUNE surged 15.71 percent yesterday to close at $7.88 after announcing that it would spin off its chip unit to concentrate on its solar business. SunEdison, which changed its name from MEMC Electronic Materials in June, had gapped down from the $10 level on Aug. 7 after second-quarter results showed larger losses than expected.
Total option volume surpassed 24,000 contracts yesterday, 5.5 times its daily average for the last month. Overall calls outnumbered puts by 11 to 1.
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