Canadian Solar Inc. (CSIQ): Option Bulls Pounce Amid Brazil News

Canadian Solar Inc. has been selected for a project in Brazil


Published on Nov 6, 2014 at 2:56 PM
Updated on Apr 20, 2015 at 5:32 PM

Canadian Solar Inc. (NASDAQ:CSIQ) has tacked on 2.6% today, after announcing it has been selected for a major photovoltaic (PV) development project in Brazil (subscription required). With this rally, the shares -- at $30.47 -- are finally back in the black on a year-to-date basis. Meanwhile, options traders are eyeing additional upside for the alternative energy stock over the next several months.

Diving right in, CSIQ's most active option is the January 2015 31-strike call, where 470 contracts have been exchanged. All have done so at the ask price, implied volatility has risen 4.8 percentage points to 71.5%, and volume outstrips open interest. All things considered, it's safe to assume bullish bets are being initiated at the near-the-money strike.

Today's call buyers are hopeful CSIQ will spike north of $31 by the close on Friday, Jan. 16, when the options expire. This isn't totally out of the question, given that the stock's intraday high is $31.73, touched in late-morning trading. Accordingly, delta on the Canadian Solar Inc. (NASDAQ:CSIQ) call is lodged at 0.54, suggesting a better than 1-in-2 chance the option will be in the money at expiration.

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