Thursday, December 10, 2009

Ratio Call Spread Player Places a Modestly Bullish Bet on First Solar, Inc. (FSLR)

The stock closed within twenty cents of the 50-day SMA ($135.56) yesterday and stopped. Currently trading down $2.36 at $133.00.
From Schaeffer's Research:

In a post below, I dissected a long call spread on (AMZN). Interestingly enough, I've pinpointed a similar trade today on First Solar, Inc. (FSLR). While both strategies can be defined as bullishly biased call spreads -- and eerily enough, even the strike prices match up -- there's one key difference between the two option plays.

FSLR price chartShortly after the opening bell rang this morning, a block of 312 calls crossed the tape near the bid price on FSLR's December 140 call. These contracts appear to have been sold for $2.74 apiece. Simultaneously, a block of 156 contracts traded near the ask price on FSLR's December 135 call, suggesting these options were purchased.

In other words, it looks like this trader initiated a bullish ratio call spread on FSLR. By purchasing contracts at the stock's December 135 call, the speculator is revealing that she expects the shares to rally modestly during the short term (FSLR is trading near $132.70 at last check)....MORE