First Solar Stock Sees Increased Put Activity

The equity boasts a solid technical setup

Deputy Editor
Jan 3, 2023 at 12:50 PM
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With 2022 in the rearview, the future of the clean energy sector is still unclear. Amid the ongoing push to shift to sustainable energy in order to preserve the environment, First Solar, Inc. (NASDAQ:FSLR) has seen an unusually high amount of bearish options activity.
 
More specifically, FSLR just appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of names on the S&P MidCap 400 Index (SP400) that have attracted the most weekly options volume in the last two weeks. During this time, 74,830 calls and 122,527 puts were exchanged. The most popular contracts during these two weeks were the weekly 12/23 125-strike put and the January 2023 125 put.

 

MAO FSLR Chart January 032022

First Solar stock is sliding today, down 2.4% to trade at $1466.19, but boasts a solid technical setup that could help the shares soon rise. Specifically, the equity just pulled back to its 80-day moving average, which coincides with its October closing high. What's more, FSLR is 120% higher in the last six months.

MAO FSLR 2 Chart January 032022

Despite this large lead, seven of 20 covering brokerages still rate the equity a tepid "hold." Meanwhile, the 12-month consensus price target of $161.59 is a 10.7% premium to the stock's current perch. This leaves the shares open to a round of upgrades and/or price-target adjustments.  

Options traders have been more bearish than usual, and an unwinding of this pessimism could add tailwinds. Data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows First Solar stock with a 50-day put/call volume ratio of 1.28 that stands higher than 100% of annual readings. Echoing this, FSLR's Schaeffer's put/call open interest ratio (SOIR) of 2.05 stands higher than 97% of readings from the past 12 months. 

Those looking to speculate with options can do so for a bargain right now. The stock's Schaeffer's Volatility Index (SVI) of 51% stands in the relatively low 34th percentile of readings from the past year, meaning options traders are pricing in low volatility expectations at the moment. It's also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) stands at an elevated 87 out of 100, meaning First Solar stock has exceeded options traders' volatility expectations during the past 12 months.

 

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