Options Trading News

May 13, 2013  Mon 12:20 PM CT

Green-energy stocks have been melting higher, and traders apparently think that there's no going back for Trina Solar.

On Friday optionMONSTER cited big put selling in the Chinese company's June 4.50 contracts for $0.32. TSL has muscled higher since, and now the trader is adjusting that position by repurchasing those puts for $0.19. He or she also apparently closed another short-put position in 10,990 June 4s for $0.09.

The investor replaced both bets with by selling about 22,000 of the June 5 puts for $0.30 in a new opening trade. The net result is that the trader collected about $0.16 of credit and is now on the hook to buy stock for $5 rather than $4.50 and $4.

Investors often sell puts when they like a stock but don't want to spend a lot of capital to get long. The strategy also programs a buy order at lower prices. (See our Education section)

TSL is up 8.2 percent to $6.20 in afternoon trading and 69 percent since the beginning of April. It's been squeezing higher along with other solar companies following massive selloffs in 2011 and 2012. The industry group is the strongest in the last month of more than 100 tracked by optionMONSTER's researchLAB screening tool.

Total option volume in TSL is 19 times greater than average so far today.

Our scanners have also detected bullish activity recently in related names such as GT Advanced Technologies and MEMC Electronic Materials.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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