OptionsHouse

Options Trading News

July 22, 2013  Mon 12:20 PM CT

SUNE: SEE CHART GET CHAIN FIND STRATEGIES
Solar has been shining bright, and the bulls are piling into SunEdison today.

optionMONSTER's Heat Seeker monitoring system detected the purchase of almost 3,000 October 11 calls, most of which priced for $0.90. Volume was almost twice previous open interest at the strike, indicating that new positions were initiated.

These long calls lock in the price where shares can be purchased in the company, which provides silicon wafers used to make photovoltaic cells. Investors now can rest easy for the next three months, assured they will not miss a continued rally in the name, while also limiting the amount of capital at risk if it moves in the opposite direction. (See our Education section for more on how you to manage trades more effectively with options.)

SUNE is trading at $9.94, up 3 percent on the day and more than 200 percent this year. Sentiment has been brightening toward the solar industry since last summer as investors find value in stocks still trading well below their peaks of the last decade. SUNE, for instance, fetched more than $80 back 2007 and 2008.

Total option volume is twice the daily average so far today, according to the Heat Seeker. Calls outnumber puts by a bullish 7-to-1 ratio.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »