Warren Buffett is famous for making people rich over the long
haul, but today he's handing out fast money.
MidAmerican Energy, part of the billionaire's sprawling Berkshire
Hathaway, agreed to pay $2 billion to $2.5 billion for two
solar-generating stations in southern California. That's triggering
a rally in solar-energy stocks, making it the best performer of any
group tracked by our
But the fast money is really in another name, First Solar.
Yesterday its Weekly 34.50 calls expiring this Friday traded for
$0.05 and ended the session valued for just $0.01. Then when
Buffett's news hit, FSLR shot higher by 10 percent to $35.25--but
that was nothing compared with the calls, which gained
. (See chart below)
Ironically, the news wasn't even related to FSLR directly, but
rival SunPower. MidAmerican's investment in the solar space is
being interpreted as a vote of confidence in the solar-energy
industry. SPWR doesn't normally trade a lot of options and doesn't
have weekly contracts, so fast-money traders looked to FSLR.
Solars had been climbing even before Buffett made his move, and
entered the session as the
on researchLAB over the preceding month.
Total option volume in FSLR is twice the daily average so far
today, with short-term weekly contracts dominating the activity.
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