SPWRA – SunPower Corp. – A chunk of 20,000 put options was traded on SunPower earlier at the far-dated January 2012 expiration. Time and sales indicates that the puts were sold today and in looking at the history of open interest today’s action is probably a closing sale intended to protect a lurch lower in the share price, which is now higher today at $12.49. Although the initial purchase of the protective put options in mid-May might have coincided with a long stock position by an investor worried that SunPower might fall even further. They say that timing is everything and this case proves no exception. The likely buyer appears to have bought within one week of the 52-week low at $10.11. If that’s the case the buyer is signaling today that he’s so confident over the prospects for the future that the protection is no longer necessary.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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