Thursday, October 14, 2010

Buying Calls Ex Post Facto: the First Solar Story (FSLR)

If these are speculative positions I would be tempted to leg into a short.*
From Schaeffer's Research:

Option volume has skyrocketed to roughly four times the norm today on First Solar, Inc. (FSLR), with approximately 35,000 calls and 19,000 puts changing hands on the alternative energy issue. Despite the fact that expiration Friday is just around the corner, speculators have set their sights on FSLR's October series of options.
FSLR price chartFSLR's October 145 call is most active, with 9,958 contracts trading. Not far behind is the October 150 strike, where 5,633 calls have been exchanged, and the October 140 call, with 4,133 contracts changing hands.
Most of these options have traded at the ask price, suggesting that buyers are driving the bulk of today's call volume. Plus, volume is outstripping open interest at all three strikes, indicating that new bullish bets are being added ahead of expiration.
With FSLR trading at $143.23 this afternoon, today's two most popular call strikes are out of the money. In fact, for those 150-strike calls to go in the money by expiration, the shares would need to rally about 5% from their current perch by the close of tomorrow's session....MORE


October 5 
Shorting First Solar; Possibly Long Monsanto after Tomorrow's Earnings Release (FSLR; MON)
The First Solar call is based on flagging momentum going into earnings (which will beat) and the recent CFO's insider sell* (small but his timing was good last quarter)...
October 7 
"First Solar Announces 380 Megawatt Increase in Orders for 2011" (FSLR)
Go and get short the stock based on decreasing momentum and look like a genius for 24 hours.
In pre-market action the stock looks to regain 95% of yesterday's decline, up $3.38 at $142.02.....
October 7 
Schaeffer's Technical Comments On First Solar (FSLR)
The stock is up $3.51 at $142.15. If the stock doesn't regain and hold yesterday's $3.99 loss I will consider adding to the short....
October 12 
Covering the First Solar Short (for Now) FSLR
It's been a week since "Shorting First Solar; Possibly Long Monsanto after Tomorrow's Earnings Release (FSLR; MON)" the stock is at $137.05 the short was good for a bit over five bucks in a generally rising market, good earnings are coming and I get scared doing handstands on the gates of hell.
The news that sparked today's move:

October 14 
First Solar to build thin-film plant in Vietnam: plans to double capacity by 2012 (FSLR)

And a lot of backround:

October 12 
General Electric Takes Aim at First Solar NextGen, Adds CIGS to Solar Offerings:: Will Primestar CdTe Be Phased Out? (GE; FSLR; SI)