Earnings Preview: The Home Depot, Inc., First Solar, Inc., and SunPower Corp

Among the stocks gearing up to report earnings tomorrow are blue-chip retailer Home Depot Inc (NYSE:HD), as well as solar energy concerns First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on HD, FSLR, and SPWR.

• HD, which will release fourth-quarter earnings tomorrow morning, has been on the rise, with the shares notching a fresh all-time high of $113.16 earlier today for a 7.8% year-to-date gain. However, puts have been popular in the stock's options pits, as Home Depot Inc's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.91 sits in the 69th percentile of its annual range. Traders anticipating a positive post-earnings reaction have history on their side -- in the session following its last eight earnings releases, HD has gained an average of 2.2%. Short-term speculators are paying historically fair prices for the stock's options, as its Schaeffer's Volatility Index (SVI) of 20% sits in the 53rd percentile of all similar readings taken over the past year.


• Ahead of tomorrow night's earnings release, FSLR is up 11.3% year-to-date to perch at $49.63. In the options pits, First Solar, Inc.'s 10-day ISE/CBOE/PHLX call/put volume ratio of 4.46 ranks just 4 percentage points away from an annual high. Meanwhile, in the session following its last eight earnings reports, the shares of FSLR have experienced an average decline of 5.1%. Near-term options for the equity are currently available for slightly above-average prices, as its SVI of 59% sits in the 61st percentile of its annual range.


• Sector peer SPWR has also been trending upwards, with the shares advancing 9.3% year-to-date to reach $28.22. Accordingly, call buying in the options pits is nearing fever pitch, with SunPower Corporation's 10-day ISE/CBOE/PHLX call/put volume ratio of 9.41 standing just 1 percentage point away from the highest such reading of the past year. Looking back, in the session following its last eight earnings reports, SPWR has lost an average of 3%. Traders are paying middling prices for their short-term bets on the stock, as its SVI of 58% sits in the 56th annual percentile.