Put Traders Pounce on Sinking Solar Stock

The Federal Reserve's interest rate decisions are heavily impacting the solar sector

Deputy Editor
Dec 20, 2023 at 12:55 PM
facebook X logo linkedin

While the prospect of lower interest rates has reignited excitement surrounding solar stocks, the Federal Reserve's decision to leave rates untouched to close out the year did little to lift such equities. Array Technologies Inc (NASDAQ:ARRY), for example, is trading 6.5% lower at $17.26 at last check, adding to its 23.1% quarter-to-date deficit.

It looks like caution surrounding the sector could be here to stay until the central bank follows through on its dovish commentary, but some options traders are taking advantage of the pullback.

Specifically, Array Technologies stock's normally quiet options pits have seen 2,831 puts traded so far today, or double the average intraday volume. Most popular today is the January 19, 2024 17.50 put, though new positions are being sold to open at the second most popular contract, the February 25 call. 

The increased interest in bearish bets denotes a shift in recent sentiment. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 50.87 stands higher than 92% of readings from the last 12 months. This means that more than 50 calls were bought for every put over the last two weeks.

A downgrade from Piper Sandler on Monday could be behind ARRY's increased bearish activity. The analyst downgraded shares to "neutral" from "overweight," and cut its price target to $22 -- still a roughly 21% premium to the equity's current perch.

Those looking to bet with options can do so for a bargain right now. The security's Schaeffer's Volatility Index (SVI) of 62% ranks in the 18th percentile of its annual range, meaning options traders are pricing in relatively low volatility expectations at the moment. 

Following its surge to a Sept. 15 two-year high of $26.64, Array Technologies stock has erased more than 30%. In early November, the security touched its lowest level since July 2022, and though it quickly bounced back from this floor, its 150-day moving average capped the rally just above the $20 mark.

Now in a deficit for the third time in four sessions, ARRY is back below its year-to-date breakeven mark, off 10.5% in 2023. However, it's worth noting that despite this deficit, its still outperforming the iShares Global Clean Energy ETF (ICLN), which now sports a 23.2% year-to-date deficit. 

ARRY Chart December 202023


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI