SunPower bulls triple their money

Solar stocks have been rallying in recent weeks, and now it’s SunPower’s turn to shine.

On June 19, Investitute’s market scanners identified the purchase of 3,000 December $8 calls in one print for $1.05 with shares at $7.69. This was clearly a new position, as open interest in the strike was a mere 65 contracts before the trade occurred.

Those calls traded up to $3.40 today, more than tripling in value. The stock surged 43.6 percent in the same period, a huge gain but still far less than that of the options on a relative basis.

Long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

SPWR jumped 6.75 percent to $11.07 today. The solar-power company is scheduled to report earnings on Aug. 1 after the close.

Another industry rival, First Solar, has seen a September call trade with gains of more than 45,000 percent.