First Solar, Inc., SunPower Corporation Traders Take Different Paths

First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) are rallying on IPO buzz

Jun 10, 2015 at 2:19 PM
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Solar stocks are blistering up the charts this afternoon, after 8point3 Energy Partners LP -- a yieldco formed by First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) -- announced the pricing of its upcoming IPO. Option traders are getting in on the action, too -- though not everyone's gambling on additional upside.

Shares of FSLR are up 1.8% at $50.07, bringing their year-to-date gain north of 12%. The stock is also sitting atop the round-number half-century mark, which has served as support for the past three weeks. If that's not enough, history tells us the shares tend to come on strong during June.

FSLR calls are crossing at more than double the usual afternoon rate, and one group of speculators expects the solar issue to extend its lead north of $50 through Friday's close. Specifically, these option bulls are buying to open the weekly 6/12 50-strike call.

These call buyers may be hoping First Solar, Inc. (NASDAQ:FSLR) gets some positive analyst attention over the next couple days. Currently, 57% of brokerage firms consider the stock a "hold" or worse.

Moving along, SPWR boasts an even more impressive intraday advance of 4.5%, flirting with $31.35 -- and earlier testing resistance at its 50-day moving average. Year-to-date, the equity has tacked on over 21%.

Not everyone's buying the hype, though. SPWR puts are changing hands at 13 times what's expected at this point in the session, and buy-to-open activity is transpiring at the June 29.50 and 31.50 strikes, among others. In other words, these bears foresee -- or are hedging against -- a pullback by next week's close, when front-month options expire.

This represents a break from the norm for SunPower Corporation (NASDAQ:SPWR). During the last two weeks across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than nine calls for every put. The resultant call/put volume ratio of 9.10 sits just 2 percentage points from an annual high.

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