Norse
Active Member
I have 50% of my Call-portofolio in SOL. most of them April 5 Calls. theyre at 1 dollar atm. CHEAP!
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Alternative Energy Investor Discussions
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I have 50% of my Call-portofolio in SOL. most of them April 5 Calls. theyre at 1 dollar atm. CHEAP!
Norse
Active Member
Gtoffo
Member
If you read through the last 40 or so pages of this thread you will see my explanations for why SCTY may struggle.
The reason it is struggling today probably has to do with the new share issue. They are diluting shareholders by almost 10% so it makes sense that the stock is going down 7%
Norse
Active Member
Just curious what people are doing with their Sept. SOL $5 calls?... The stock seems pinned at $4.80. The option moved up some, but not as much as I had hoped. I am debating selling today before the volatility completely runs out. Of course, the hope in holding it would be it would continue to push up in the next few weeks, but I tend to get burned when I try to wring out every last cent.
I bought some yesterday for $0.20 and tried getting greedy early and selling 40% of them for $0.45. After that didn't work out I put a limit to sell 60% of them for $0.30 and it got struck on the SOL bounce to $4.90. So I was able to recoup about 80% of my investment and I am letting the other 40% of options ride for the next couple of weeks.
I feel like SOL has a lot of room to run in the next few weeks and normally I would have held on to the options. But that damn Syria conflict is on the horizon and there is 3 full days before the markets open again on Tuesday and I am afraid there might be some more selling next week. So I sold to protect my capital while still keeping some upside.
The stock will either run to $6+ or it will settle in the low to mid $4s over the next few weeks, it all depends on the markets. In the long run though, I can see SOL trading in the teen$ by this time next year. Short term options are definitely not the way to play these stocks. Buy and hold some shares if you want to invest in these companies.
Thanks, Sleepy. Yea, I have many shares which I've been holding for a long-time. Also have Jan 14 $5C options. So a smart man would probably cash in the Sept. $5's, and if there's a run up, at least I'll benefit with my Jan. $5's. Of course, gamblin' man would let it roll. Which is what I may do. Or maybe I'll sell half, which isn't a bad idea. I guess I should be satisfied with singles, but I'm always looking for that homerun. I've sold too early so many times, that it can eat you up. But, of course, better to sell too early than too late.
I really don't see SOL going down next week unless the whole markets go down, which is likely to happen in my opinion. If we have normal markets then SOL should continue its post earnings run. If it wasn't for the bad market today SOL would be above $5. Why would anyone want to sell SOL after a good earnings report like this unless out of fear.
If SOL starts tanking then I might have to liquidate my other half of the 401(k) and load up on SOL stock 100%.
As a LONG time holder in solar positions in general, I've been asking myself those kind of questions for a long time. It seems SO obvious to me that solar is the way to go for our energy needs. Somewhere I had this chart (couldn't find it) comparing how much energy we can get from solar vs our world needs. It's crazy -- it dwarfs everything else. Granted, just because solar is the way to go, doesn't mean any particular company will be profitably run, but it just amazes me how far behind we are.
Gtoffo
Member
Well... SCTY is still above 30$... SCTY investors are in panic mode. Today you could clearly see big investors bailing out at certain price points. We are down over 50% since the month's high on no major negative news.
I bought some more stock around high 30$ today. Bough with some of my TSLA profits.
In the long run I think this will be a good price. In the short term I don't really see it going down much more... most of the "new" investors in this stock got in around 35-40$ in the last few months. If they wanted to sell and cut losses I think they would have done so by now. What do you guys think?
Tuesday morning will be... "interesting"....
I bought some more stock around high 30$ today. Bough with some of my TSLA profits.
In the long run I think this will be a good price. In the short term I don't really see it going down much more... most of the "new" investors in this stock got in around 35-40$ in the last few months. If they wanted to sell and cut losses I think they would have done so by now. What do you guys think?
Tuesday morning will be... "interesting"....
SOL at $4.77
SOL's Q2 earnings report was very impressive IMO. They beat all their pre-announced raised Q2 numbers. In their conference call (ReneSola Ltd. (ADR) (SOL): ReneSola Management Discusses Q2 2013 Results - Earnings Call Transcript - Seeking Alpha) a few things stuck out:
1. The shipped 849 MW of solar wafer and modules (up from original 700-720 MW guidance, and 760-770 MW raised Q2 guidance/pre-announcement).
2. They're sold out of inventory for the rest of the year (since August), and are now taking orders for next year.
3. ASPs are rising and will continue to rise into 2014. This is helping with revenue & GM.
4. They're penetrating the U.S. market and already have 50 employees in the U.S. and some warehouses.
Overall, they seem to be a very good place with demand for solar and their products picking up.
I'm not sure how SOL will do since it is pretty volatile. But I did pick up some options at market open only to see the price dip and my options dip even more. But I'm sticking it out (at least for now) because I like the SOL charts and SOL's strong ER/CC. The previous ATH for the past 2 years was $4.68. Today's open and ATH was $5.11. So, if SOL can break through the $5.11 resistance level, then it can go much higher IMO. However, the key is if it can break through or not.
My biggest mistake entering today at market open was not respecting that the stock had gapped up well above the previous ATH of $4.68. The $5.11 became a floating price point without much support. Now, if the ER was complete blowout (ie., they raised FY 2013 guidance by a significant amount), then I think the strength of the ER could have supported the gap. But as is, the strong ER wasn't enough to support the gap above the ATH of the past 2 years, $4.68.
So, it looks like SOL filled the gap today (today's low was $4.68). This can be a good signal (depends on how you look at it). Now that SOL has filled the gap, it can now consolidate and make a run for the new ATH (of past 2 years) of $5.11. This is of course, something doesn't derail it (ie., overall solar market, or overall market conditions, etc).
For TSL's (Trina Solar) run recently, I should have seen that TSL had a ATH (of past year) of $7.74 going into Q2 ER. The day prior to Q2 ER it closed at $6.78 and then gapped up a bit to open at $7.09. However, though this was a gap it wasn't a floating ATH (of past year), as there has been decent price in the 7s over the month prior. So, TSL was really primed for a run on a good ER, and it quickly took out the previous ATH (of past year) of $7.74 and was able to keep running.
Another incidence comes to mind and that's with TSLA's (Tesla) Q2 ER. It gapped from $134.23 the day of ER and opened at $154.35 (eventually hitting $158.88). However, with TSLA prior to ER the ATH was $145.73. So, TSLA gapped well above $145.73 post-ER and had it was "floating" in a sense. If TSLA's ER was a complete blowout, I think it could have held the gap, but since it was between good and great IMO, it wasn't enough to hold the gap, especially since it's a sizable gap between $145.73 and $154.35. So, TSLA closed the gap, going all the way down to $145.73 and eventually touching $135 (in probably what was an over-correction) before returning to new ATHs.
Anyway, today I'm reminded at how difficult it is to play earnings and how it requires a lot of skill, experience, knowledge. So, I'm giving myself some homework and will be reading some books on this:
Amazon.com: Option Strategies for Earnings Announcements: A Comprehensive, Empirical Analysis eBook: Ping Zhou, John Shon: Kindle Store
Keene on the Market: Trade to Win Using Unusual Options Activity, Volatility, and Earnings (Wiley Trading): Andrew Keene: 9781118590768: Amazon.com: Books
SOL's Q2 earnings report was very impressive IMO. They beat all their pre-announced raised Q2 numbers. In their conference call (ReneSola Ltd. (ADR) (SOL): ReneSola Management Discusses Q2 2013 Results - Earnings Call Transcript - Seeking Alpha) a few things stuck out:
1. The shipped 849 MW of solar wafer and modules (up from original 700-720 MW guidance, and 760-770 MW raised Q2 guidance/pre-announcement).
2. They're sold out of inventory for the rest of the year (since August), and are now taking orders for next year.
3. ASPs are rising and will continue to rise into 2014. This is helping with revenue & GM.
4. They're penetrating the U.S. market and already have 50 employees in the U.S. and some warehouses.
Overall, they seem to be a very good place with demand for solar and their products picking up.
I'm not sure how SOL will do since it is pretty volatile. But I did pick up some options at market open only to see the price dip and my options dip even more. But I'm sticking it out (at least for now) because I like the SOL charts and SOL's strong ER/CC. The previous ATH for the past 2 years was $4.68. Today's open and ATH was $5.11. So, if SOL can break through the $5.11 resistance level, then it can go much higher IMO. However, the key is if it can break through or not.
My biggest mistake entering today at market open was not respecting that the stock had gapped up well above the previous ATH of $4.68. The $5.11 became a floating price point without much support. Now, if the ER was complete blowout (ie., they raised FY 2013 guidance by a significant amount), then I think the strength of the ER could have supported the gap. But as is, the strong ER wasn't enough to support the gap above the ATH of the past 2 years, $4.68.
So, it looks like SOL filled the gap today (today's low was $4.68). This can be a good signal (depends on how you look at it). Now that SOL has filled the gap, it can now consolidate and make a run for the new ATH (of past 2 years) of $5.11. This is of course, something doesn't derail it (ie., overall solar market, or overall market conditions, etc).
For TSL's (Trina Solar) run recently, I should have seen that TSL had a ATH (of past year) of $7.74 going into Q2 ER. The day prior to Q2 ER it closed at $6.78 and then gapped up a bit to open at $7.09. However, though this was a gap it wasn't a floating ATH (of past year), as there has been decent price in the 7s over the month prior. So, TSL was really primed for a run on a good ER, and it quickly took out the previous ATH (of past year) of $7.74 and was able to keep running.
Another incidence comes to mind and that's with TSLA's (Tesla) Q2 ER. It gapped from $134.23 the day of ER and opened at $154.35 (eventually hitting $158.88). However, with TSLA prior to ER the ATH was $145.73. So, TSLA gapped well above $145.73 post-ER and had it was "floating" in a sense. If TSLA's ER was a complete blowout, I think it could have held the gap, but since it was between good and great IMO, it wasn't enough to hold the gap, especially since it's a sizable gap between $145.73 and $154.35. So, TSLA closed the gap, going all the way down to $145.73 and eventually touching $135 (in probably what was an over-correction) before returning to new ATHs.
Anyway, today I'm reminded at how difficult it is to play earnings and how it requires a lot of skill, experience, knowledge. So, I'm giving myself some homework and will be reading some books on this:
Amazon.com: Option Strategies for Earnings Announcements: A Comprehensive, Empirical Analysis eBook: Ping Zhou, John Shon: Kindle Store
Keene on the Market: Trade to Win Using Unusual Options Activity, Volatility, and Earnings (Wiley Trading): Andrew Keene: 9781118590768: Amazon.com: Books
DaveT,
Trading earnings is indeed a tricky endeavor, especially when using options. In addition to choosing the right direction, one also has to contend with the actual earnings report (revenue, profit, margins, and guidance), analysts expectations such as whisper numbers as well as the markets' interpretation and reaction. On top of that, with options, one has to deal with expected move (which market makers will manipulate to options buyers such as ourselves to have them expire worthless), drop of implied volatility and time decay. When an earnings trade goes against you, options buyers often refer to it as the trifecta of pain (ie delta/gamma going against you, along with drop in implied volatility, and time decay).
Trading earnings is indeed a tricky endeavor, especially when using options. In addition to choosing the right direction, one also has to contend with the actual earnings report (revenue, profit, margins, and guidance), analysts expectations such as whisper numbers as well as the markets' interpretation and reaction. On top of that, with options, one has to deal with expected move (which market makers will manipulate to options buyers such as ourselves to have them expire worthless), drop of implied volatility and time decay. When an earnings trade goes against you, options buyers often refer to it as the trifecta of pain (ie delta/gamma going against you, along with drop in implied volatility, and time decay).
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Gtoffo
Member
This could be the main reason behind SCTY's sluggish performance lately compared to the rest of the solar industry.... While all other solar companies benefit from a rise in prices (>profits), SolarCity works best when panels are a cheap commodity.
If this is true: does anyone have any good sources of predictions for future prices/supply/demand of panels?
Until we have very cost-effective energy storage, solar will always be a marginal energy source. There is no doubt that it is an important piece of the puzzle areas like Southern California and the desert southwest, but in most of the rest of the country solar is simply not cost-effective as a wholesale energy generator. In Massachusetts the subsidies have to go up to hundreds of dollars per megawatt hour to make solar work. That is simply not sustainable long-term basis.
DaveT - thanks for your input it is always appreciated. I think that SOL will go up in a "normal" market, but I think that there is a good chance we are only half way through our market correction; I survived the first half so I can't sell now just in case the worst is behind us (it isn't).
I am impressed with all the reading you do. I am a very analytical person, but I don't apply any analysis when buying and selling stock. I have one simple strategy: buy low and sell high, all based off of gut feeling. Investing is an art and once you embrace that you won't need to read all of those books to get an edge. Now if I could only apply that same mentality to my golf game, I would be pretty damn good.
Two and a half months ago a lot of people were arguing that SCTY is a lot better investment because they don't make their own panels (which were getting cheaper every day back then) and I said to go where the puck is going to be and not where it is. Solar panels are only going to get more expensive, since supply is going down and demand is going way up. This is only just the beginning, as you can see DaveT posted that Renesola is sold out and taking orders for 2014.
Since you live in Boston, I am sure that you know a lot more on this topic than I do, but I still can't believe that you need "hundreds of dollars per megawatt hour to make solar work." Just back of the envelope calculation using conservative numbers to build a 1MW power plant:
Cost $3/Watt installed = $3 million
Useful life = 20 years
Fuel cost = $0
Maintenance = minimal
Annual electricity generation = 2GWh (probably more like 1.8 but wanted to use round number) or 2,000 MWh.
20 year production = 40,000 MWh
Cost per MWh = $3,000,000/40,000 = $75/MWh
Margin of error = =/- $25/MWh
So it costs about $75/MWh to produce electricity from solar. Here in Texas where electricity is really cheap there are companies that are signing contracts to buy energy from coal plants at above $50/MWh or $150/MWh from biomass plants, or $70/MWh from Wind, etc. Solar is very competitive and you don't need hundreds of dollars per MWh of subsidies. I am curious where you got this information from?
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JRP3
Hyperactive Member
You also have to price in the fact that solar is not dispatchable, and needs fossil fuel backup.
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