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Dim outlook seen for Energy Conversion

Energy Conversion Devices has been falling steadily, and one trader sees little reason for hope of a turnaround this year.

optionMONSTER's Depth Charge monitoring system detected the purchase of 5,000 December 1 puts for $1 and the sale of an equal number of December 1 calls for $0.25. Volume was more than 7 times open interest in both strikes.

The trade cost $0.25 and is akin to shorting the beaten-down solar company, making money below $0.75. It will also force the investor to sell shares above $1, so may have been the work of a shareholder looking for downside protection. (See our Education section)

ENER fell 11 percent yesterday and has lost more than 80 percent of its value in the last year. Revenue has collapsed over that time as government subsidies have dried up and competitors have taken market share.

The company's CEO quit in May, and management is slashing jobs. The next earnings report is scheduled for Aug. 25.

Overall option volume in the name was 9 times greater than average yesterday, according to the Depth Charge.

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

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

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