Canadian Solar shines in green fervor

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Bullish call buying is extreme in Canadian Solar today as buyers pour into the green-energy sector.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 July 26 calls, most of which priced for $2.40. Volume was more than 4 times previous open interest, which indicates that new money was put to work.

These long calls give traders the right to purchase CSIQ shares for $26 through expiration, no matter how high the stock may be at the time. That can help manage risk and also produce significant leverage if the shares continue to rally, though the contracts could quickly lose value on a pullback. (See our Education section)

CSIQ is up 6.05 percent to $27.54 in afternoon trading, following the broader industry group higher. Our researchLAB analytics tool identified short-term momentum building in the space, and today Yingli Green Energy reported a strong quarter as "exceptional demand from Japan and other emerging markets" pushes up solar-panel prices.

Overall option is quadruple the daily average in CSIQ today, according to the Heat Seeker, with calls accounting for more than 70 percent of the activity.

The opportunities in solar were cited at various times in our Market Action webinar recently, with GT Advanced Technologies, SunPower, and FirstSolar identified as potential beneficiaries.

SWPR also appeared on the Heat Seeker today as buyers targeted the September 45 calls and later the July 34 calls. The October 75 calls were bought in SolarCity, as well.

Disclosure: I owns shares in SPWR and GTAT.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CSIQ

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