SunPower attracted bullish option activity yesterday for the second session in a row.
optionMONSTER's Heat Seeker tracking program detected the purchase of more than 6,000 December 25 calls mostly for $0.64 to $0.96 yesterday. Volume was more than 10 times open interest at the strike, which indicates that new money was put to work.
This follows heavy buying in the December 23 and 23.50 calls on Monday , as cited on our InsideOptions Pro subscription service at the time. The value of those contracts more than doubled by yesterday.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall. (See our Coaching section)
SPWR rose 4.85 percent to $24.42 yesterday but is down 12 percent in the last week. The solar-power company gapped up on strong results and guidance in late October but fell sharply last Wednesday after announcing plans to sell convertible bonds. Its next earnings report is expected to come out on Feb. 24.
Total option volume in the name topped 14,300 yesterday, more than 4 times its daily average for the last month. Overall calls outnumbered puts by 18 to 1, reflecting the session's bullish sentiment.
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