Back on January 19 we had a similar post, "Options Update: Trader Expects Extended Slide for First Solar, Inc. (FSLR)":
The stock is trading down seven cents at $124.00 in early pre-market. The stock actually showed some relative strength on Friday, closing down about half the percentage decline of the Nasdaq.From Forbes:
If I had to guess, I'd say the November 12 lows, $115.09 intraday and $115.37 closing are the immediate downside risk although as you'll see in the story someone is thinking lower....
If the bearish options traders are right, First Solar should soon slip below the century mark.
A pair of analyst downgrades and price decline of as much as 7% to $106.30 Tuesday fueled bearish options activity on the manufacturer of solar modules. First Solar was cut to underperform from neutral and given a 12-month target share price of $90 at Wedbush. FSLR also received an 18-month target share price of $90 and a sell rating at Wunderlich Securities.
One pessimistic options player purchased a debit put spread to position for continued downward movement in the price of shares by April expiration. The investor purchased approximately 3,400 puts at the April $105 strike for a premium of $6.86 apiece, and sold about the same number of puts at the lower April $85 strike for an average premium of $1.57 each. The net cost of the spread amounts to $5.29 per contract. Maximum potential profits of $14.71 per contract are available to the trader if First Solar's shares plummet 20% from the current day's value to $85 by April expiration. The investor breaks even on the transaction only if shares decline another 6.2% to $99.71.