Plug Power Inc (NASDAQ:PLUG) stock saw unusually high options trading activity on Wednesday. Traders bought 15,126 put options on the fuel cell company, double the average daily volume of 7,563 put options. That coincides with a decline in the stock as sentiment towards alternative fuel-cell firms turned increasingly negative after FuelCell Energy Inc (NASDAQ:FCEL)’s disappointing second quarter results.

Plug Power

Plug Power was affected by FuelCell’s results

Plug Power Inc (NASDAQ:PLUG) shares tumbled 4.5% yesterday to $4.21, while FuelCell Energy Inc (NASDAQ:FCEL) sank 13% to $2.06. FuelCell posted a second quarter loss of 4 cents per share, wider than the consensus estimate of 3 cents in losses. Revenues declined 9.8% YoY to $38.3 million, and missed the Wall Street estimate of $45.2 million. There was no particular reason FuelCell suffered losses in Q2, investors have seen that fuel cell technology companies have never made money.

Short interest in Plug Power Inc (NASDAQ:PLUG) saw a massive increase in May. The number of shares sold short surged from 26.05 million on April 30 to 36.11 million on May 15, the latest settlement date for which data is available. During its first quarter earnings call last month, Plug Power CEO Andy Marsh discussed how the company plans to improve its margins. In Q1, the Latham, New York-based company incurred a loss of $75.9 million, mainly due to $68.5 million in one-time charges, on revenues of $5.6 million.

How Plug Power plans to increase gross margins

Marsh said the company has made several strategic investments to boost gross margins. In April, Plug Power Inc (NASDAQ:PLUG) acquired ReliOn, which makes fuel cell stacks and stack assembly systems. By bringing the fuel cell stacks technology in-house, the company will lower its reliance on Ballard Power Systems Inc. (NASDAQ:BLDP) . Andy Marsh said the ReliOn purchase will increase EBITDAS losses by $1 million in FY2014. But it will increase the company’s gross margins from 2015 onward.

The company has also partnered with Hyundai Hysco to manufacture and market hydrogen fuel cells in Asia. Plug Power Inc (NASDAQ:PLUG) forecasts to reach break-even by the end of this year.

Plug Power Inc (NASDAQ:PLUG) shares gained 3.45% to $4.50 at 12:02 PM EDT on Thursday.