IB Options Brief: First Solar, Inc. (FSLR)
FSLR ñ First Solar, Inc.
Big prints in First Solar put options appear to be the work of an investor taking profits on one sizable put spread and simultaneously initiating a fresh bearish stance on the stock. Shares in FSLR trade 0.35% lower on the day at $35.46 as of 12:30 p.m. in New York, a near 80.0% discount to the stockís April 1, 2011, 52-week high of $163.00, and a staggering 89.0% discount to the May 2008 all-time high of $317.00.
The investor responsible for the largest options trades on FSLR today appears to be banking gains on one bearish stance initiated back on Valentineís Day, while positioning anew for the shares to worsen in the near term. It looks like the trader pocketed net profits of $0.70 per contract on the 11,625-lot Mar. $32/$39 put spread he or she originally purchased at a net premium of $2.88 apiece. Shares in FSLR have declined roughly 8.0% since the put spread was initiated, allowing the investor to sell the spread today at a net premium of $3.58 per contract.
Next, it appears the strategist established a fresh bearish stance on First Solar, buying the 12,533-lot Mar. $27/$34 put spread at a net premium of $1.80 per contract. Profits are available on the position in the event that FSLRís shares decline another 9.2% to breach the effective breakeven price of $32.20 by expiration. The put player may walk away with maximum possible profits of $5.20 per contract at March expiration should the price of the underlying plunge 23.9% to settle below $27.00. Of course, the trader may choose to take profits on the new bearish spread in advance of expiration should the spread widen out in the next few weeks.
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