Strategy looks for MEMC to stay alive
David Russell | email@example.com
optionMONSTER's tracking systems detected the sale of 4,000 October 2 puts for $0.25, looking for the beaten-down solar stock to hold its ground. If it remains above $2 through expiration, the puts will be rendered worthless and the trader will keep the $0.25 credit. There was no open interest in the strike before the trade appeared, so it is a new position.
Below $2 the put seller will be forced to buy shares if assigned, but the effective entry price would be $1.75. The stock hasn't traded that low since late 2001. (See our Education section)
WFR is down 2.04 percent to $2.40 in midday trading and has lost more than three-quarters of its value in the last year. The company, whose silicon wafers are used to make photovoltaic cells, has suffered as government subsidies dry up and inventory gluts decimate prices.
Solar is the worst-performing industry group in the last year, according to our researchLAB analysis tool. WFR cratered yesterday after reporting a wider-than-expected quarterly loss and is the weakest in the group during the last week.
Overall option volume in the stock is 7 times greater than average so far today.