Solar bulls turn to Yingli Green

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Solar stocks have been coming back to life, and the bulls are gunning for a huge move in Yingli Green Energy.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,000 June 10 calls for $0.71 and the sale of an equal number of June 15 calls for $0.19 yesterday. Volume was more than 15 times higher than the previous open interest in each strike, indicating that new money was put to work.

The investor paid just $0.52 to open this vertical spread and has the right to collect $10 if the stock closes at $15 or higher on expiration. That would be profit of some 1,800 percent from the shares barely doubling. (See our Education section for the potential leverage of options.)

YGE rose 1.74 percent to $7.01 yesterday. The stock climbed from below $2 to above $8 between April and October, pulled back to its 200-day moving average in December, and has been continuing higher since. It last saw $15 in early 2010, when solar-energy companies were in the process of a major selloff.

Sentiment in the industry has improved in the last 18 months as bargain hunters find value and business conditions improve, making it one of the top groups on our researchLAB market-analysis tool in the long term.

Total option volume in YGE was about average yesterday, but calls outnumbered puts by a bullish 10-to-1 ratio.



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: YGE

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