Call Activity Accelerates on A123 Systems, Inc.

jingriver

Call Activity Accelerates on A123 Systems, Inc.
Author
Sarah Wasserman

6/16/2010 9:46:55 AM

A123 Systems, Inc. (AONE) saw a surge in option activity on Tuesday, with roughly 22,000 contracts traded -- 10 times the battery manufacturer's usual daily volume. Calls were especially popular, with 13,000 of these bullishly oriented options changing hands -- nine times AONE's usual call volume of fewer than 1,500 contracts.

The June 9 call takes the title of the day's most active strike. Specifically, 1,845 contracts changed hands -- half at the ask price. Open interest increased by 450 contracts overnight, revealing that fresh call contracts were added here.

In the back-month series, the July 9 call saw volume of 1,061 contracts traded -- 61% at the ask price, suggesting they were bought. Open interest increased by over 600 contracts overnight, revealing that a portion of these calls were likely bought to open.

Technically speaking, AONE has been a laggard on the charts in 2010, driven lower by its descending 10-week and 20-week trendlines -- which have led the stock to losses of 60% year-to-date. However, in the past few weeks, AONE has found footing atop the $8 level, and is currently hovering just below $9, around $8.93.

Given option players' focus on the 9-strike call on Tuesday, it seems that traders are confident AONE will break above this level in the near term.