Solar panel manufacturer
First Solar (FSLR) is up 40% over the past year, slightly edging out the overall market, although shares are well off their summer highs. One trader sees a rally in the weeks ahead.
That’s based on the November 15 $245 calls. With 14 days until expiration, 12,344 contracts traded compared to a prior open interest of 190, for a 65-fold rise in volume on the trade. The buyer of the calls paid $4.35 to make the bullish bet.
First Solar shares last traded for about $200, so shares would need to rise by $45 or about 22%, for the option to move in-the-money. Shares are about 33% off their 52-week high of $306.77.
The solar producer has had a fair year, with earnings up 17% and revenues rising 11%.
Action to take: Shares have been trending lower as many traders are placing bets ahead of the election.
While solar and green energy aren’t a huge issue, shares are also getting oversold here, and could be poised for a bounce higher no matter the outcome. That makes the stock a speculative buy in the low $200 range.
For traders, the November 15 $245 calls could see mid-double-digit returns. But they likely won’t move in-the-money before expiration, so traders should look to take a quick profit on the trade.
Disclosure:
The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
