Gloomy Day Attracts First Solar, Inc., SunPower Corporation Options Traders

Solar stocks First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR) are fresh off three-year lows

by Alex Eppstein

Published on Sep 14, 2016 at 12:06 PM
Updated on Jun 24, 2020 at 10:16 AM

It's been a dark day for solar stocks First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR). Both stocks are sharply lower, and fresh off three-year lows of $34.50 and $8.01, respectively. Amid this sector-wide free-fall, options volume is accelerated on both FSLR and SPWR.

Starting with First Solar, the stock's call are trading at triple the usual intraday rate. The most active strike is the September 35.50 call, where speculator are buying new positions -- anticipating the shares will rebound back above $35.50 by Friday's close, when the front-month options expire. At last check, FSLR was down 3.5% at $35.13.

Bearish options betting has picked up on First Solar, Inc. of late -- and it's no wonder, considering the aforementioned technical backdrop. Specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.89 ranks near the top quartile of its annual range.

On a percentage basis, SPWR is even worse off today, down 9.2% at $8.04. It's little surprise, then, that the stock's put options are being exchanged at eight times the expected intraday clip. Digging deeper, buy-to-open activity is detected at the March 2017 7-strike put. In other words, the buyers anticipate SPWR will drop below $7 by expiration next March -- territory not charted since January 2013.

This strong preference for long puts represents a departure from the longer-term trend toward calls. In fact, during the last 10 days at the ISE, CBOE, and PHLX, SunPower Corporation traders have bought to open 7.19 calls for every put -- a ratio that registers in the bullishly skewed 87th annual percentile. Of course, given that 26.4% of the stock's float is sold short, it's likely some calls have been purchased by short sellers as protection against an unforeseen rally.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter