Solar panel manufacturer First Solar (FSLR) is down 18% over the past year, and shares just broke to a new 52-week low. One trader sees further weakness into 2027.
That’s based on the January 2027 $120 puts. With 658 days until expiration, 7,626 contracts traded compared to a prior open interest of 100, for a 76-fold rise in volume on the trade. The buyer of the puts paid $26.70 to make the bearish bet.
First Solar recently traded for about $126.50, so shares would need to decline by about $6.50, or just 5%, for the option to move in-the-money.
Shares have just broken to a new 52-week low, and could drop to the $100 range as the next level of support for the stock.
While investors have soured on solar and alternative energy since the election, First Solar has performed well operationally. Revenues are up 30%, and earnings growth rose by 13% in 2024.
Action to take: The price action tells the tale for now, and interested investors, even with shares at 10 times forward earnings, should wait for a better entry point, likely in the low $100 range, where the stock may stabilize before it can trend higher.
For traders, the January 2027 $120 puts have plenty of time to play out. More aggressive traders may want to use a lower strike price or shorter timeframe and look for a quicker gain from a continued decline in over the next few months.
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.
