Call Buying Surges on First Solar Stock

Long-term, FSLR has seen a notable rise in open interest

Mar 14, 2019 at 3:37 PM
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First Solar, Inc. (NASDAQ:FSLR) continues to move higher in 2019, now up almost 29% to test the $55 mark, equivalent to a 33% decline from its 52-week high of $81.72 from April. FSLR shares earlier topped out at a roughly eight-month high of $55.62, extending a run above their 200-day moving average. The rise hasn't been missed by options traders, judging by data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

The 10-day call/put volume ratio across these exchanges comes in at 5.65, and ranks in the 98th annual percentile. So not only have almost six calls been bought to open for every put, but the such a pace is nearly the highest in a year. From a broader view, peak open interest is at the soon-to-expire March 58 call, where more than 12,000 contracts reside. We should also call attention to the almost 3,000 contracts at the long-term and far out-of-the-money January 2020 115-strike call.

Most analysts are bullish on FSLR shares, and Goldman Sachs this morning came out with a note which predicted strength from large-cap solar stocks. The brokerage firm already had a "buy" rating on the First Solar from the start of the year. Looking closer at Goldman Sachs's note, it's expecting strength out of solar markets in the U.S., Europe, and Middle East, adding it sees "potential upside emerging in China." The call comes as global growth concerns hang over markets.

Either way, those wanting to speculate on First Solar should know that it Schaeffer's Volatility Index (SVI) of 30% ranks 2 percentage points from a 12-month low. In other words, volatility expectations appear low, suggesting it's a good time to buy premium.

first solar stock chart




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