Bulls catch some rays with $FSLR

Bullish option traders posted exponential gains in First Solar (FSLR) today.

On Jul. 6, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 13,200 Weekly $53 calls expiring on Jul. 10 for $0.35 to $0.68 with shares at $51.70. Volume was well above the strike’s previous open interest of 126 contracts, showing that this was fresh interest.

Those calls traded up to $5.22 this afternoon, at least 7.5 times their original prices. The stock rose 12.34% at the same time, showing how quickly options can far outpace gains in their underlying shares.

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.

FSLR jumped 9.22% to close at $58.06 this session. The solar-energy company surged along with its peers today after news yesterday that Sunrun (RUN) and Vivint (VSLR) would combine.