Wednesday, March 30, 2011

Clean Energy Fules (CLNE) - Stock and Vol Up Again on Legislation

CLNE is trading $16.84, up 12.8% with IV30™ up 7.5%. The LIVEVOL™ Pro Summary is below.


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Clean Energy Fuels Corp. is a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada.

I wrote about CLNE on 2-22-2011. You can read that post here:
Clean Energy Fuels (CLNE) - Vol and Stock Pop on UPS Deal

The stock was up ~ 10% that day to $13 and change. A month later (ish), it's all the way to nearly $17. And the bullish order flow continues...

Here's a quick snippet of news:
The U.S. House of Representatives is expected to take up Boone Pickens' plan to increase natural gas consumption for a second time next week and this time around the measure, called the NAT GAS Act, is expected to pass. Pickens told reporters in Houston on Tuesday that he expects the bill to pass before the House breaks for its summer recess.
Source: Pickens' Natural Gas Plan Could Pass This Time, from Indie Research by the Staff.

FYI:  Pickens is a founder of Clean Energy Fuels according to the post above.

The company has traded over 15,000 contracts on total daily average option volume of just 2,848. Calls have traded on a 3.7:1 ratio to puts. The most active options are the Apr 15-17 calls. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the Apr 16 and 17 calls are mostly opening (compare OI to trade size). The order flow in all three strikes (Apr 15-17) looks long today and the existing OI in the Apr 15 also looks long. So, in English, call buyers are abundant...

The Skew Tab snap (below) illustrates the vols by strike by month.

We can see at the tail end of the upside skew (OTM calls), the vol is elevated relative to the other strikes in Apr and May. It's interesting to note that the Apr vol is actually below the May vol with the exception of the 19 strike.

Finally, the Charts Tab (6 months) is below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

We can see the stock pop at the end of Feb (the first blog), and now again today. The IV30™ has just now reached the HV20 (short-term realized vol) and is already well above the long-term realized vol (HV180).

Possible Trades to Analyze
1. Two ways to play the bullish side and still scalp some vol:
a. Apr 18/19 call spread for $0.20. This sells ~ 6 vol points higher than it purchases.
b. Apr/May 19 call spread for $0.35. This sells ~ 8 vol points higher than it purchases.

This is trade analysis, not a recommendation.

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