EU - China agreement reached. Details TBD.
EU, China Reach Agreement on Solar-Panel Dispute - WSJ.com
EU, China Reach Agreement on Solar-Panel Dispute - WSJ.com
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Alternative Energy Investor Discussions
- Thread starter ShortSlaver
- Start date
-
- Tags
- TSLA
Can't access it, subscribers only.
Here's an article from NYT
Europe and China Agree to Settle Solar Panel Fight - NYTimes.com
"On Saturday, officials at the European Commission said they could not give details of the deal, including the price that Chinese exporters would pay to sell their panels in Europe, until the arrangement had been formally approved by the commission. But a European Union official, who spoke on condition of anonymity because the deal had not yet been formally approved, said the two sides had agreed to a minimum price of 0.56 euros per watt (74 cents), which would base any potential surcharge on the amount of electricity generated by each imported panel."
Not sure how it's going to affect my SCTY, if any, but it should be good for my CSIQ
Equation is simple.. if similar rules trickle down to US, which I think it will soon, what is the SCTY cost to buying panels. Most likely, that price will go up. I think SPWR is a winner. SOL too is a winner.
SCTY is efficient in what it does though, so it may still be able to compete with other installers. Anyone has insight into current SCTY & SPWR cost/watt?
SCTY is efficient in what it does though, so it may still be able to compete with other installers. Anyone has insight into current SCTY & SPWR cost/watt?
Where is the Like button?
The star icon at the bottom left of each posting can give reputation points to the author. That's probably not what you meant, but it's the closest thing.
Jonathan Hewitt
Active Member
Awesome! Just how I predicted the deal got done. Now lets hope that my other prediction is correct and that this will mean a 20% - 50% rally in solar stocks, especially Chinese. In my opinion Chinese Solar should be up 10% - 30% on Monday, and SPWR, FSLR should be up around 10%+ as well. SCTY will probably tag along in the solar rally and have a nice gain, but this deal is kind of neutral for SCTY. That is how I think the markets should react, but what happens is a big unknown. I think that the solars might start off slow around +5% and then gather steam throughout the day.
This has to be positive news for the industry and for the globalization of the world's economy. Trade war avoided, should result in a huge rally in all of the global markets.
I loaded up on options on SOL, CSIQ, and SPWR, and bought several thousand shares of each company. I hope that the markets figure this one out and the stocks rally big time. If they don't then I will be loading up even more on SOL come Monday. IMO, this deal has basically guaranteed a profit for SOL in Q3 or Q4, and that they will be giving out some very nice guidance for H2 on their earnings call. I was going to buy some TSL next week and now it looks like it might be too late for that play.
Think about this for a second: SOL gets half its business from Europe, have their own Poly Plant (huge benefit after last week's Chinese tariffs on imported poly), and guided towards ~$0.52/Watt as production costs. Now they can't sell in Europe below 0.55 Euro cents which is about $0.74. This gives them a 40% Gross Margin in Europe. The rest of their business comes from high margin US and Japan. If my numbers are correct and SOL's sales don't decline by a significant amount in Europe then this makes the company instantly profitable and possibly even VERY profitable. On second thought this stock should probably rally about 50% - 100% on Monday (I know it won't happen, but it should - the problem is that hardly any analysts follow this company and no one knows how to value these companies). This goes for all other Chinese Solar companies as well: TSL, YGE, CSIQ, JASO, JKS, and even STP, LDK.
Exciting times indeed!
This has to be positive news for the industry and for the globalization of the world's economy. Trade war avoided, should result in a huge rally in all of the global markets.
I loaded up on options on SOL, CSIQ, and SPWR, and bought several thousand shares of each company. I hope that the markets figure this one out and the stocks rally big time. If they don't then I will be loading up even more on SOL come Monday. IMO, this deal has basically guaranteed a profit for SOL in Q3 or Q4, and that they will be giving out some very nice guidance for H2 on their earnings call. I was going to buy some TSL next week and now it looks like it might be too late for that play.
Think about this for a second: SOL gets half its business from Europe, have their own Poly Plant (huge benefit after last week's Chinese tariffs on imported poly), and guided towards ~$0.52/Watt as production costs. Now they can't sell in Europe below 0.55 Euro cents which is about $0.74. This gives them a 40% Gross Margin in Europe. The rest of their business comes from high margin US and Japan. If my numbers are correct and SOL's sales don't decline by a significant amount in Europe then this makes the company instantly profitable and possibly even VERY profitable. On second thought this stock should probably rally about 50% - 100% on Monday (I know it won't happen, but it should - the problem is that hardly any analysts follow this company and no one knows how to value these companies). This goes for all other Chinese Solar companies as well: TSL, YGE, CSIQ, JASO, JKS, and even STP, LDK.
Exciting times indeed!
Last edited:
I am with you sleepy, I did just options on SPWR and SOL and now i really which i had more. I am going to wake up Monday and look at the market reaction. If its slow in the morning i am going to pick up a bunch more SOL $7.50 options and Maybe some more SPWR options as well, once again pending the market reaction.
The answer to that one is heavily tilted in favor of SCTY. But that is not the right measure to use, because you are selling energy and not power. The proper measure to use is Levelized Cost of Energy (LCOE) and on that basis Sunpower is very competitive. Just as good as or better LCOE pus significantly better panels than SCTY uses would skew the discussion in SPWR's favor.
Unfortunately for Sunpower though not many people understand this concept and Sunpower has to work very hard to educate people that "Hey, we are better and we are actually cheaper too." On a cost/watt basis it may seem like a different story and that is the metric that most people first look at; even though it is a misleading number primarily due to degradation, longevity, and efficiency.
JRP3
Hyperactive Member
Actually no it isn't. SunPower has been in business for 30 years and they use higher quality materials and offer the best and longest 25 year warranty in the business (because they can). Their panels were originally designed for concentrated solar use, which means they need to be able to withstand more extreme conditions. Longevity, durability, and lower levels of degradation are a few reasons why SunPower panels sell at almost double the price of TSL, YGE panels that SCTY uses.
It is like saying that it is too soon to make definitive statements about quality/longevity or Tesla vs. Kandi/BYD.
There are also independent test labs for panels that are tested over a course of 2 to 6 months. They try to recreate the abuse that panels might take over a 30 year period in those few months. SunPower always crushes the competition in reliability testing.
Last edited:
Zzzz...
Member
Hey, Yingli also warrant their panels for 25 years. Because they can. And so virtually any other major manufacturer. Yingli for example guaranties that output after 25 years would be no less then 82% of rated power output for Panda panels. What is the SunPower power output warranty after 25 years?
As for efficiency, I'll quote: Yingli Solar PANDA is a new monocrystalline silicon module technology with n-type solar cells that have average efficiencies higher than 19.5%.
Not so huge difference with SPW. And SunPower basically lying in their marketing materials about what they face from competitors - 15% efficiency and similar BS. And since SunPower have no problem with being nonethical, trying to lie their way through, I would not read too much into "independent" testings that probably heavily sponsored by SPW. What really matters is terms of warranties, there are money at stake there, producer would eventually had to pay if panels wont perform.
EDIT: found SunPower warranty: 87% of rated power output at year 25. Yes it is better then 82% from Yingli, but judge for yourself how big of difference is it.
As for efficiency, I'll quote: Yingli Solar PANDA is a new monocrystalline silicon module technology with n-type solar cells that have average efficiencies higher than 19.5%.
Not so huge difference with SPW. And SunPower basically lying in their marketing materials about what they face from competitors - 15% efficiency and similar BS. And since SunPower have no problem with being nonethical, trying to lie their way through, I would not read too much into "independent" testings that probably heavily sponsored by SPW. What really matters is terms of warranties, there are money at stake there, producer would eventually had to pay if panels wont perform.
EDIT: found SunPower warranty: 87% of rated power output at year 25. Yes it is better then 82% from Yingli, but judge for yourself how big of difference is it.
Last edited:
Sleepy,
With regards to SPWR, you have stated that these guys are “sand-baggers” when it comes to earnings estimates and forward guidance. They provided guidance of 0.05-0.20 for this most recent qtr, with current analysts avg estimate of 0.11. I think in one of your previous posts, you believe they will earn 0.15-0.20 for this qtr. If they provide their usual conservative guidance for the 2[SUP]nd[/SUP] half of the year, and with the entire solar industry likely to rally based on the EU-China deal on Sat, do you see additional upside to SPWR after earnings, if they earn 0.15-0.20 but provide only conservative guidance.
Also, with CSIQ and SOL likely to announce earnings in mid august (based on their prev earnings dates of mid may), do you think they will pre-announce their Q2 earnings if they are good.
As always, thanks for your insight.
With regards to SPWR, you have stated that these guys are “sand-baggers” when it comes to earnings estimates and forward guidance. They provided guidance of 0.05-0.20 for this most recent qtr, with current analysts avg estimate of 0.11. I think in one of your previous posts, you believe they will earn 0.15-0.20 for this qtr. If they provide their usual conservative guidance for the 2[SUP]nd[/SUP] half of the year, and with the entire solar industry likely to rally based on the EU-China deal on Sat, do you see additional upside to SPWR after earnings, if they earn 0.15-0.20 but provide only conservative guidance.
Also, with CSIQ and SOL likely to announce earnings in mid august (based on their prev earnings dates of mid may), do you think they will pre-announce their Q2 earnings if they are good.
As always, thanks for your insight.
Zzzz... I know that you are a SunPower hater, but this is the second time that you are spreading misinformation in this thread. Yingli's product warranty is only 10 years and SunPower's is 25 years. The industry tricks you into believing you have a better warranty than you do. Only SPWR actually has a real 25 year warranty:
http://us.sunpowercorp.com/cs/Satel...goBlobs&blobwhere=1300286163024&ssbinary=true
http://www.yinglisolar.com/assets/uploads/warranty/downloads/Multi_standard_110922.pdf
You also point out some numbers using Yingli's top of the line module, which is expensive and still doesn't even come close to SunPower's in terms of efficiency, quality or actual real world efficiency (not the 19% they claim it has, because when you look at that number SPWR's panels are 24% efficient).
Keep on hating on SPWR, while I keep on making money on SPWR. And what you wrote about SPWR mgmt, "since SunPower have no problem with being nonethical, trying to lie their way through" is considered libel.
I hope that you are short SPWR.
Zzzz...
Member
I only got problem that SunPower compares their product to lowers specs panels they could find that they actually are not competing with. That is very misleading and yes, I consider that lying.
Yes, there are many "top of the line module" offerings by competitors out there. As for Yingli warranty, I quote:
Yingli Solar further warrants that if, within twenty-five (25) years after
the Warranty Start Date, any PANDA Module exhibits a power output
less than 82% of the nominal power output for that PANDA Module as
specified on its original product label (the “82% Threshold”), and if such
decrease in power below the 82% Threshold is determined by Yingli
Solar to be due to defects in materials or workmanship under normal
application, use and service conditions, Yingli Solar will remedy such
decrease in power by, at its reasonable option, either (a) replacing or
repairing the defective PANDA Module at no charge to the Customer
for replacement modules or parts, (b) providing Customer with
additional PANDA Module(s) to make up for such decrease in power
so that the power output equals or exceeds the 82% Threshold,
provided, it is possible for the Customer to mount such additional
PANDA Module(s) or (c) refunding the difference between the actual
power output of the PANDA Module and the 82% Threshold, based
on the current market price of a comparable PANDA Module at the
time of the Customer’s claim.
Yes, there are many "top of the line module" offerings by competitors out there. As for Yingli warranty, I quote:
Yingli Solar further warrants that if, within twenty-five (25) years after
the Warranty Start Date, any PANDA Module exhibits a power output
less than 82% of the nominal power output for that PANDA Module as
specified on its original product label (the “82% Threshold”), and if such
decrease in power below the 82% Threshold is determined by Yingli
Solar to be due to defects in materials or workmanship under normal
application, use and service conditions, Yingli Solar will remedy such
decrease in power by, at its reasonable option, either (a) replacing or
repairing the defective PANDA Module at no charge to the Customer
for replacement modules or parts, (b) providing Customer with
additional PANDA Module(s) to make up for such decrease in power
so that the power output equals or exceeds the 82% Threshold,
provided, it is possible for the Customer to mount such additional
PANDA Module(s) or (c) refunding the difference between the actual
power output of the PANDA Module and the 82% Threshold, based
on the current market price of a comparable PANDA Module at the
time of the Customer’s claim.
sub
Active Member
Im not picking sides here as I don't have enough info, however, I just had 34 Yingli panels (contractors choice) equaling 8kw hours on my roof and they do have a 25 year warranty. They are also producing above spec. That is the extent of my knowledge on panels.
I just linked you a warranty sheet and yet you still seem to not be able to understand it. Here is another warranty sheet (identical?) for the PANDA product that you talked about:
http://www.yinglisolar.com/assets/uploads/warranty/downloads/PANDA_standard_110928.pdf
It clearly states:
1 LIMITED PRODUCT WARRANTY
Yingli Solar warrants to the original end user purchaser (the “Customer”)
that the PANDA Modules shall be free from defects in materials and
workmanship under normal application, use and service conditions
during the period beginning on the earlier of the date the PANDA
Modules were purchased by the Customer or one (1) year from factory
dispatch (the “Warranty Start Date”) and ending ten (10) years after
such Warranty Start Date. If a PANDA Module fails to conform to this
Limited Product Warranty during this ten-year period, Yingli Solar will, at
its reasonable option, either (a) repair or replace the defective PANDA
Module at no charge to the Customer for replacement modules or parts,
or (b) provide the Customer with a refund equal to the current market
price of a comparable PANDA Module at the time of the Customer’s
claim. This Limited Product Warranty does not warrant a specific power
output, which shall be exclusively covered under the Limited Power
Warranty below.
There is a 10 year product warranty, so if the product breaks after 10 years, you are SOL (S*** out of Luck) and your 25 year power warranty is worthless. Whereas SunPower offers a 25 year product warranty.
If Yingli sold cars then it is basically guaranteeing you that your car will achieve 30 MPG for at least 25 years. But if you car breaks down in year 11, then it becomes worthless and you have a piece of junk installed on your roof. Whereas SunPower is guaranteeing that you that the car will run for 25 years and that it will get at least 40 MPG.
You guys really need to understand the contracts that you are signing, especially when installing solar panels. Now if you you got a lease through SCTY and a Yingli panel goes bad, then SCTY will replace it and you are safe; but that is a cost to SCTY.
@sub - read your contract again and I would bet that the Yingli panels you installed have a 25-year "POWER" warranty and only a 10 year "PRODUCT" warranty.
- - - Updated - - -
Sunpower aquired a bunch of solar manufacturers in the past and they own those companies that make "commodity" panels and they used those panels (several different brands), because they are available and are able to legally test them and provide results without getting sued.
Yes, it is unfortunate that they compare their own panels to these cheap panels, but that is all the data they have to work with. Half of the world's capacity is of similar quality though, so SPWR is trying to show why they are better than the "commodity" panel business.
- - - Updated - - -
I did some research and found that you are a hypocrite for calling SunPower Management liars. You are using cell efficiency of 19%, when in fact Yingli's Panda MODULES are 16.5% efficient, which is what really matters and that is close to 15% (which is an average number for not top of the line modules):
Monocrystalline | Yingli Solar
Today’s average cell efficiency on commercial production lines exceeds 19% with up to 16.5% module conversion efficiency.
So who is the liar here? I find your post very ironic.
SunPower has 24.2% cell efficiency, which leads to a 21.5% module efficiency, which is still 30% more efficient than Yingli's top-of-the-line PANDA module.
The solar industry plays games with numbers and you have been fooled like many others. I am trying to help people understand solar panels, and you are not helping by calling SPWR mgmt liars. Clearly you don't understand the numbers either; and that goes for both warranty claims as well as module/cell efficiency.
Last edited:
Sleepy -
I was considering buying SOL and CSIQ options on Friday but decided to hold off, thinking that there wasn't any that that the impending EU-China deal would be completed over the weekend (poor decision...:crying.
I've read through this entire thread and have to say your insight has been incredibly valuable and accurate. If you don't mind me asking, what kinds of SOL and CSIQ options did you purchase last week and what kinds do you intend to purchase early on Monday?
Thanks in advance,
-tmont
I was considering buying SOL and CSIQ options on Friday but decided to hold off, thinking that there wasn't any that that the impending EU-China deal would be completed over the weekend (poor decision...:crying
.I've read through this entire thread and have to say your insight has been incredibly valuable and accurate. If you don't mind me asking, what kinds of SOL and CSIQ options did you purchase last week and what kinds do you intend to purchase early on Monday?
Thanks in advance,
-tmont
SPWR Q2
I actually made a mistake and they guided towards $0.05 - $0.15 for Q2. Their Q1 guidance was for $0.05 - $0.20 and they delivered $0.22. Their last 3 out of 4 quarters they exceeded analyst consensus by more than 100%.
If SPWR delivers $0.15, then you have H1 at $0.37, which is more than half way to their FY guidance of $0.60 - $0.80 (as well as consensus of $0.77). They have said several times that they are expecting a strong second half of 2013 financially, and never said the same about H1. So if H1 is just ok, then H2 will be better, so they have to raise guidance. There is also some risk that they were able to shift some of the income from H2 to H1 and not have a great H2. I don't think this to be the case though based on the earnings call in May.
But wait, there is a tiny detail that nobody picked up on in the Q1 earnings call:
Additionally, as a result of the United States government sequestration being triggered, there were automatic cuts to the treasury cash grant program. This impacted the value of certain outstanding cash grants for some projects and leases. In light of this, we updated our cash grant expectation and took a non-GAAP charge of $25 million in the quarter to accommodate this change. We do not expect to record any additional charges related to the sequester and, if not for this charge, our Q2 result would have been significantly better than reported. The GAAP charge was $18 million due to the timing of revenue recognition.
I can't quite figure it out, I am not sure if they took this in Q1 or Q2? I tried hard to find it in Q1 10Q, but it isn't there. Maybe they really meant Q2, or maybe that is just a typo in the transcript. Either way though, this means that H1 EPS would have been a lot higher if not for the Sequester; $0.20 to be specific.
Now imagine H1 EPS of $0.57 and we are supposed to see a "strong" second half financially. I can see $0.60+ EPS for H2 happening, especially since everything has gone right since the last conference call. Euro-China negotiations will lead to higher ASP's and force EU to buy panels elsewhere and not only from China. This is good for SPWR. The whole industry has been booming a lot quicker too. The recent demand announcements from China, Thailand, Netherlands, Saudi Arabia, etc. are huge.
I think that SPWR will have to raise guidance for FY 2013. They guided towards $0.60 - $0.80 and they should be around $1 or more imo. If they don't raise guidance then the stock will not have much more room to run in the short run.
Unless something went wrong with the company that we don't know about (and this is a real risk), it has to raise guidance.
As far as CSIQ and SOL: SOL already preannounced two weeks ago and the stock has been rallying big time lately.
I will fill you in on a secret with CSIQ that nobody knows about and the market hasn't priced in yet:
On June 28th, they closed the deal on a 10 MW plant called Brockville 1, which they sold for about $50m - $60m. All of this revenue is recognized in Q2 (because of the accounting method they used - completed contract method, i.e. all or nothing). This will be a high margin sale as well.
I don't know what they guided to revenue wise in Q2, but in Q1 they had $264m in revenue. Q2 analyst consensus (for all 2 analysts) is $420m. So they have an extra 15% surprise up their sleeve. This bodes very well for CSIQ in Q2.
CSIQ is usually the first Chinese solar to announce earnings. Expect them to come out this week with an official release date. Their is a small possibility that they preannounce their earning if they are very good.
- - - Updated - - -
I actually think that TSL might be one of the biggest movers come Monday (only because of its big European exposure). That is why I was advocating TSL in the past and started looking into it as well. I was going to buy some TSL options this week, but it looks like that ship has sailed. CSIQ and SOL are still the best chinese solar plays in the short run though, and if the market gets it right then they will rally more than TSL. On the flip side, maybe I am completely wrong and the market doesn't like this deal and solar stocks come crashing down on Monday. Who knows?
The options I bought for SOL J14 $5 strike at $0.20/option. I bought a lot of them and now they are around $0.75/option. I might sell those and buy some $7.50 J14 options instead if I can get a 3 for 1 deal. Otherwise I will just hold on.
CSIQ I bought some J14 $16 options and they will be ITM shortly. I also bought some Aug $17 options when they were selling for $0.25. The stock still has to make a big run to reach my strike price, but if they announce earnings pre Aug 17 (which they should), then I am confident it will reach my strike price.
If solar stocks start out slow on Monday then it might be worth purchasing some CSIQ Aug options (at least slightly OTM). Some Sep calls for TSL, YGE, and SOL should work out good too.
Just remember that Chinese solar companies have done very well since April. With good news they still have room to double in a very short time. A hint of bad news will lead to profit taking and selling and you will lose all of your money on the options. If you want to play it safe then buy stock instead.
Options are extremely risky here. I am willing to take the chance because I think that I have a good enough chance of being right that it is worth the risk. One thing I can't afford is to be right and not take the risk with options (and sit depressed thinking how much money I could have made). If I am wrong and lose a few $thousand, I can live with the consequences knowing that I took the risk and tried. A few $thousand is a lot of money for money though, so I am taking a huge risk here.
It is probably too late to do anything now that the announcement is out. Even if the stocks start out only 5% up and end the day at 20% up, the volatility premium will be so high in the morning that the options will probably trade at the same price all day long in my above scenario. The only thing you can do in a scenario like that is to buy the stock early in the morning. If the stocks start the day 10%+ then it is too late to do anything significant. The time to buy was last week and I even wrote this on Wed, July 24:
"In the mean time it is a good time to buy. Don't wait any longer!"
I actually made a mistake and they guided towards $0.05 - $0.15 for Q2. Their Q1 guidance was for $0.05 - $0.20 and they delivered $0.22. Their last 3 out of 4 quarters they exceeded analyst consensus by more than 100%.
If SPWR delivers $0.15, then you have H1 at $0.37, which is more than half way to their FY guidance of $0.60 - $0.80 (as well as consensus of $0.77). They have said several times that they are expecting a strong second half of 2013 financially, and never said the same about H1. So if H1 is just ok, then H2 will be better, so they have to raise guidance. There is also some risk that they were able to shift some of the income from H2 to H1 and not have a great H2. I don't think this to be the case though based on the earnings call in May.
But wait, there is a tiny detail that nobody picked up on in the Q1 earnings call:
Additionally, as a result of the United States government sequestration being triggered, there were automatic cuts to the treasury cash grant program. This impacted the value of certain outstanding cash grants for some projects and leases. In light of this, we updated our cash grant expectation and took a non-GAAP charge of $25 million in the quarter to accommodate this change. We do not expect to record any additional charges related to the sequester and, if not for this charge, our Q2 result would have been significantly better than reported. The GAAP charge was $18 million due to the timing of revenue recognition.
I can't quite figure it out, I am not sure if they took this in Q1 or Q2? I tried hard to find it in Q1 10Q, but it isn't there. Maybe they really meant Q2, or maybe that is just a typo in the transcript. Either way though, this means that H1 EPS would have been a lot higher if not for the Sequester; $0.20 to be specific.
Now imagine H1 EPS of $0.57 and we are supposed to see a "strong" second half financially. I can see $0.60+ EPS for H2 happening, especially since everything has gone right since the last conference call. Euro-China negotiations will lead to higher ASP's and force EU to buy panels elsewhere and not only from China. This is good for SPWR. The whole industry has been booming a lot quicker too. The recent demand announcements from China, Thailand, Netherlands, Saudi Arabia, etc. are huge.
I think that SPWR will have to raise guidance for FY 2013. They guided towards $0.60 - $0.80 and they should be around $1 or more imo. If they don't raise guidance then the stock will not have much more room to run in the short run.
Unless something went wrong with the company that we don't know about (and this is a real risk), it has to raise guidance.
As far as CSIQ and SOL: SOL already preannounced two weeks ago and the stock has been rallying big time lately.
I will fill you in on a secret with CSIQ that nobody knows about and the market hasn't priced in yet:
On June 28th, they closed the deal on a 10 MW plant called Brockville 1, which they sold for about $50m - $60m. All of this revenue is recognized in Q2 (because of the accounting method they used - completed contract method, i.e. all or nothing). This will be a high margin sale as well.
I don't know what they guided to revenue wise in Q2, but in Q1 they had $264m in revenue. Q2 analyst consensus (for all 2 analysts) is $420m. So they have an extra 15% surprise up their sleeve. This bodes very well for CSIQ in Q2.
CSIQ is usually the first Chinese solar to announce earnings. Expect them to come out this week with an official release date. Their is a small possibility that they preannounce their earning if they are very good.
- - - Updated - - -
Sleepy -
I was considering buying SOL and CSIQ options on Friday but decided to hold off, thinking that there wasn't any that that the impending EU-China deal would be completed over the weekend (poor decision...:crying
I've read through this entire thread and have to say your insight has been incredibly valuable and accurate. If you don't mind me asking, what kinds of SOL and CSIQ options did you purchase last week and what kinds do you intend to purchase early on Monday?
Thanks in advance,
-tmont
I actually think that TSL might be one of the biggest movers come Monday (only because of its big European exposure). That is why I was advocating TSL in the past and started looking into it as well. I was going to buy some TSL options this week, but it looks like that ship has sailed. CSIQ and SOL are still the best chinese solar plays in the short run though, and if the market gets it right then they will rally more than TSL. On the flip side, maybe I am completely wrong and the market doesn't like this deal and solar stocks come crashing down on Monday. Who knows?
The options I bought for SOL J14 $5 strike at $0.20/option. I bought a lot of them and now they are around $0.75/option. I might sell those and buy some $7.50 J14 options instead if I can get a 3 for 1 deal. Otherwise I will just hold on.
CSIQ I bought some J14 $16 options and they will be ITM shortly. I also bought some Aug $17 options when they were selling for $0.25. The stock still has to make a big run to reach my strike price, but if they announce earnings pre Aug 17 (which they should), then I am confident it will reach my strike price.
If solar stocks start out slow on Monday then it might be worth purchasing some CSIQ Aug options (at least slightly OTM). Some Sep calls for TSL, YGE, and SOL should work out good too.
Just remember that Chinese solar companies have done very well since April. With good news they still have room to double in a very short time. A hint of bad news will lead to profit taking and selling and you will lose all of your money on the options. If you want to play it safe then buy stock instead.
Options are extremely risky here. I am willing to take the chance because I think that I have a good enough chance of being right that it is worth the risk. One thing I can't afford is to be right and not take the risk with options (and sit depressed thinking how much money I could have made). If I am wrong and lose a few $thousand, I can live with the consequences knowing that I took the risk and tried. A few $thousand is a lot of money for money though, so I am taking a huge risk here.
It is probably too late to do anything now that the announcement is out. Even if the stocks start out only 5% up and end the day at 20% up, the volatility premium will be so high in the morning that the options will probably trade at the same price all day long in my above scenario. The only thing you can do in a scenario like that is to buy the stock early in the morning. If the stocks start the day 10%+ then it is too late to do anything significant. The time to buy was last week and I even wrote this on Wed, July 24:
"In the mean time it is a good time to buy. Don't wait any longer!"
Similar threads
- Locked
