The shares of First Solar, Inc. (NASDAQ:FSLR - 19.67) plummeted yesterday, ending in the teens for the first time since Aug. 6, and breaching their 10-day and 20-day moving averages for the first time in a month. Against this backdrop, put players pounced on the solar concern, with roughly 80,000 of these bearishly biased bets exchanged yesterday -- about three times the norm. What's more, even a few speculators employed short-term calls to place neutral-to-bearish bets on FSLR.

On the put side, traders honed in on the October series of options, with put open interest at the 20 and 13 strikes skyrocketing by about 10,100 contracts and 5,100 contracts, respectively. In fact, most of the action was related in the form of a bear put spread. Specifically, the trader bought 5,000 October 20 puts for the ask price of $2.54, but then trimmed his cost of entry -- which represents the maximum risk -- and breakeven level by simultaneously selling an equal number of October 13 puts for the bid price of $0.31, resulting in a net debit of $2.23 per pair of puts.

In order to profit on the play, the strategist needs FSLR to perforate the $17.77 level (bought strike minus net debit) within the next couple of months. However, by selling the out-of-the-money puts, the investor's reward is limited to $4.77 (difference between strikes, minus net debit), no matter how far FSLR should sink south of $13 within the options' lifetime.

As alluded to earlier, other traders utilized calls to wax pessimistic on FSLR. Most notably, the now out-of-the-money weekly 22-strike call saw close to 6,600 contracts traded -- mostly at the bid price, suggesting they were sold. Plus, call open interest at the strike escalated significantly overnight, confirming our theory of eleventh-hour bets. By writing the calls to open, the sellers are expecting FSLR to remain beneath the $22 level through today's session. In this instance, the calls will expire worthless, and the sellers can pocket the entire premium received, which represents the maximum reward on the trade.

Technically speaking, FSLR is now dawdling beneath its aforementioned 10-day and 20-day moving averages, which served as resistance through most of July. Fueling the stock's retreat were reports that the firm halted deliveries to a photovoltaic power plant it's constructing in Arizona.