How far OTM are you looking? You could pick up Mar2014's 17s for around .75, but you'd need a ~70% runup in 5 months to break even. The 14s seem, I guess at a gut level, to have a better reward/risk ratio, but I don't have much to back that up.
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Alternative Energy Investor Discussions
- Thread starter ShortSlaver
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Remember to treat it as an all or nothing bet. If you put 1% of your portfolio in options, the most you can lose is 1%. It doesn't hurt to try 1% or less of your portfolio to learn how to play options.
In a similar boat as you @Jonathan. I have some CSIQ Jan $20 and $25 that are already doubled (bought them less than 3 weeks ago). I've increased my position in CSIQ and SPWR b/c they're my two best performing so far. No plans to hedge right now but at some point might create risk free bull call spreads and use that cash to buy more. So I'd say just hold tight and let it run
Also, after reading @sleepy's JASO post I bought some shares and March $13 strike for $1.55. I too am aggressive and just end up buying at the ask since I don't think it's worth it to fight for a nickel. Tried to place an order for Dec $12 strike but market closed before I was able to complete the transaction! Hopefully I can get them tomorrow. I really think ATM and a bit longer term (couple of months) calls are the best value. Mainly b/c these stocks seem to continue to go up so I want to give it time to make it's run
Thanks again @sleepy. But don't think I"ll put too much into JASO b/c I've been reading that their Q3 ER might not be that great. Still reading more.I actually sold some TSLA options at a slight loss b/c I think I'll be able to regain that loss faster in solar than TSLA.
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Personally, I wouldn't go that far OTM. I know in theory the further out the strike the higher the risk/reward but in practice that hasn't always turned out to be true for me. It seems like the ATM or slightly OTM options perform the best for me for these stocks that have high IV. It just seems like the really far OTM calls are just too expensive. For example, why get March 17's for .75 when you can get March 13's for 1.5? What if it doesn't go up fast enough then those 17's will lose value pretty fast, especially as IV drops. Get the closer ATM options and just hedge them with bull call spreads as the stock goes up and repeat.
Just my 2 cents.
InTheShadows
Active Member
Jonathan Hewitt
Active Member
In a similar boat as you @Jonathan. I have some CSIQ Jan $20 and $25 that are already doubled (bought them less than 3 weeks ago). I've increased my position in CSIQ and SPWR b/c they're my two best performing so far. No plans to hedge right now but at some point might create risk free bull call spreads and use that cash to buy more. So I'd say just hold tight and let it run
Personally, I wouldn't go that far OTM. I know in theory the further out the strike the higher the risk/reward but in practice that hasn't always turned out to be true for me. It seems like the ATM or slightly OTM options perform the best for me for these stocks that have high IV. It just seems like the really far OTM calls are just too expensive. For example, why get March 17's for .75 when you can get March 13's for 1.5? What if it doesn't go up fast enough then those 17's will lose value pretty fast, especially as IV drops. Get the closer ATM options and just hedge them with bull call spreads as the stock goes up and repeat.
Just my 2 cents.
Glad you agree to hold tight on CSIQ. I've decided that is what I'm going to do! As far as super OTM, what sleepy is trying to say here is that if it's 1% or less of your portfolio you may as well take the moonshot. The way I see it, JASO (and the other solars) are likely to keep on shooting up, doubling and tripling in value or more over the next year or so, OR we will see what happened last ER season (or worse) happen again the next few quarters. There were nice runups before the last ER season giving very nice gains only for them to mostly all go away. I had bought some slightly in the money front month options on CSIQ and SPWR. The SPWR ones expired worthless but I got lucky selling my CSIQ ones early so my gains on those canceled out my losses on the SPWR ones. So I can go way OTM and have a chance for thousands of percent profit or lose it all, or I can go slightly out of the money and have chance for hundreds of percent gain or lose it all. When running the mental math it seems the farthest out gives best risk reward when thinking of it that way. My gut was against this until I thought about it this way.
There of course is the chance that the stock just mildly appreciates thus making the near the money or slightly OTM the best play. Or, if you do what you're doing by creating bull call spreads that takes out a lot of the "lose it all" factor but also takes a lot of the gain a ton factor, thus making it a lot less binary. Taking that approach is probably the best strategy to ensure some sort of nice gains with only a moderately higher risk than owning stock. For % allocations greater than 1% I think what you're doing is a great strategy and I should probably do that too for more of my cash but for now I'm going to let stock be the main portion of my solar portfolio as I don't have enough time to keep up with this many solar companies and TSLA.
I'm glad we can have these types of discussions, it really helps me out!
Alright all of this talk about JASO has made me realize I dont wanna miss out on this, even though i do not really know anything about the company... Im going to take all of my profits from SCTY these last couple of weeks (leaving the original investment intact so I consider it "risk free") and put into JASO stock (dont have access to options). Dont worry sleepy im just a recent college grad so im only talking about 1000 bucks or so, even though thats quite alot of money for me it is money I can live without and that I dont consider "real", its supposed to stay on my trading account for decades to come! Thank you for the great research and everyone elses comments and thoughts!
I like your reason for buying deep OTM options. I think of options in solar stocks the same way. They will either go up a lot or go down a lot, and there is only a small probability that they go up gradually in slow but controlled manner. I don't buy options to play small probabilities.
JASO might go up quickly as I am hoping for or it might take a while. They are sitting with a lot of excess capacity (at least they were), so that is why Wall St. is not giving them any love.
I am a contrarian investor and see this as an opportunity. As solar demand continues picking up, supply will start getting exhausted. Sooner or later JASO is going to run at full capacity, and the market will price this in a lot quicker than you expect. Therefore, it is good to be in early on JASO. There is really no reason to read their financials. You are betting on my scenario to come true.
They also make high quality panels and have a lot more of the high efficiency mono-crystalline instead of less efficient multi-crystalline.
I think it is only a matter of time before JASO goes up. If for some reason they have a bad ER as justdoit said he has been reading (Can you please explain what you meant by this?), and the stock goes down, I will be buying a lot more JASO.
Norse
Active Member
JASO and CSIQ are going against the pre-market and is both up 1%. I like the volume, especially for JASO.
Thank you for this!
When can we start expecting Q3 earnings from these companies? im getting anxious and tired of waiting haha... exciting stuff
Gtoffo
Member
Solar down across the board. Bought a little JASO just in case. I wonder if we'll se the usual solar rebound as the day progresses.
Norse
Active Member
Norse
Active Member
I did that aswell, tho Im not holding a big position there at all, really not sure about their poly business.
As much as my portfolio is hating me today. (maybe largest single day hit) this pull back of roughly 4% across all my solars will pose as a nice footing to start the next run. TSL, JASO, SOL and a few others have been floating around this level for a while. Good spot to make a run from.
Just one stock in the green today, go CSIQ
I am right there with you. Except had my TSLA for only about 8 months.
I must admit I'm puzzled why solar is down across the board, sometimes heavily like JKS. I've gotten into the habit of scanning for news at night on each of them and it seemed decent, nothing to indicate something like JKS would be taking a heavier hit than the market in general.
Just the standard swings with solar. Market is green tomorrow. Solars will all be back up 4-5%. its just how it works.
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