Markets

Fast profits in Yingli Green Energy

Yingli Green Energy rallied on positive analyst comments, and option traders were all over the move.

Our Heat Seeker monitoring program detected heavy buying in the March 6 calls for $0.65 to $0.80 early in the session. The stock pushed higher and those options would inflate to as much as $1.14. More than 8,900 contracts traded against previous open interest of 4,015, which means that new long positions were initiated.

Calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. Their low cost can also result in significant leverage on a percentage basis, which is precisely what happened yesterday. (See our Education section for more.)

YGE was up about 10 percent when the calls hit, but then kept rallying and ended the day higer by 24 to $6.28. The rally came after Deutsche Bank praised the company's joint venture with Datong Coal Mine Group and said channel checks confirmed strong demand.

In another large trade, an investor rolled a bullish position in 6,000 of the January 5 calls to the January 6 calls, collecting a credit of $0.65 in the process.

Overall option volume was 15 times greater than average in the session, with calls accounting for three-quarters of the total.

(A version of this post appeared onInsideOptions Proyesterday.)

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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