A123: Bulls Are Powering Up Battery Maker's Options

Lithium-battery maker A123 Systems is up 20 percent from its IPO last month, and options action anticipates that more upside is in store.

Our Heat Seeker tracking system detected unusual activity in the October 25 calls, which traded for $0.90 to $1.75. Separately, a block of 470 December 40 calls was purchased for $0.45.

Volume was below open interest in both strikes, but overall options action in the name has been noteworthy and exceeded 13,000 contracts yesterday.

AONE rose 3.82 percent to $24.17 in late morning trading. The company, which is developing batteries for vehicles, went public at $13.50 on Sept. 24 and doubled on its first day of trading.

More than 4,000 options contracts traded in AONE today, with calls outnumbering puts by more than 2 to 1. That continues a pattern from yesterday, when more investors purchased calls despite the shares losing 10 percent of their value.

(Chart courtesy of tradeMONSTER)

Comments

[AirBoss:]

The double did not occur until October 5th.

Oct 07 09:02 AM

[Dave K.:]

I need to disclose that I work for a company with a competing technology to that of A123 and that LTL’s technology is disruptive that has a speculative component to it.

Can investors ever trust a company management team that heavily promotes itself before the ownership of the technology its batteries are based on is resolved? In reference to the litigation A123 is under going with Quebec Hydro.
www.bloomberg.com/apps...

Oct 07 10:13 AM

[BillV:]

One of my co-workers is a senior chemical engineer and had worked for Exide many years with an in-depth knowledge of the battery industry and many of the people in it. Having mentioned to him I was thinking about taking a dive into the IPO market with AONE he brought up some interesting things including the self-promotion that Dave K. mentioned above. They do make a very good product in their lithium polymer battery packs used in the radio control hobby market. But a company with a good product line should let the product(s) it makes speak for itself in sales and repeat business. Despite that, if the price takes a dip, I too will buy in.

Oct 08 09:29 PM