My colleague Joe Hargett touched on the First Solar option activity yesterday. What caught my eye is the daily chart. The action has been very choppy but it does look like two opposing forces are colliding. First is a potential pattern of higher lows in place off the November lows. The other is the recent downtrend. The stock just hit oversold levels so now we get a chance to see if the bulls can step in....MORECompare with the referenced post from Wednesday:
Options traders are snatching up puts on solar energy equipment maker First Solar Inc. (FSLR: sentiment, chart, options) today. So far, more than 19,000 of these bearishly oriented contracts have traded on the security, more than doubling the stock's average daily put volume of 7,360 contracts. What's more, options traders are focusing on FSLR's soon-to-expire August options. Some 7,300 contracts have changed hands on the stock's out-of-the-money August 125 put, while more than 4,000 puts have traded on FSLR's August 130 strike. Currently, the shares are hovering just below $130 per share, placing the August 130 puts at the money.
Drilling down on the activity at FSLR's August 125 put, I discovered that a majority of today's volume has traded at the bid price. While most of this activity is likely the closure of existing positions, since August options expire at the end of the week, one block caught my eye. Specifically, a block of 100 contracts, marked "spread," traded on the Chicago Board Options Exchange (CBOE) at 11:02 a.m. for the bid price of $2.05, or $205 per contract, indicating that the contracts were most likely sold to open....MORE