Alternative Energy Investor Discussions

[sleepyhead]

Wow, JASO managed to close at nearly exactly $11...taking a nice little bump near the end to get there. Perfectly screwing most folks with $11 strikes on put/call. I'm not normally one to put much credence in market manipulation, but having the week's action finish out that way strains credulity to the utmost.

I had both short $11 calls and short $11 puts, so it worked out perfectly for me

Screw the MM! If you can't beat them, join them. I took a play right out of their book and shoved those calls down the MM's throat, so that they can get a taste of their own medicine.

I rolled the short puts to July $12's and pocketed $1.28, and bought back the short $11's for 0.03 about 10 seconds before close.

BTW, one time I had short TSLA let's call it $230's and the stock closed at $230.01. But I never got called to deliver stock. If you are long calls that expire ITM, then you can call your broker up to 5:30 EST on Friday to not take delivery of stock and let them expire worthless. I assume this happens a lot when they finish 0.01 ITM, but I am just guessing.

 

[DaveT]

I still think that the SCTY movement is mostly shorts covering and we'll see some pullback. Thoroughly enjoyed the conversation in the other thread about scty, but my simplistic view is that solar city is burning a ton of cash, issuing stock, and in a field that is getting more and more crowded (granted, they have an overabundance of clients and they have brand name recognition), but in order to bring a factory up to speed i think they will be burning more in the next 3 years than wall street likes to see, and wallstreet only looks 3 years out at the farthest (IMO). I think that's why the short interest is so high. Many retailers take a longer view and don't mind a <7% return each year as long as there's progress, and wall street calculates the present day value discounting 7%, finds it overvalued, and takes a short view, so you get 35% of the float short and then some good news sparks a 25% rally and wallstreet gets the screw this time- the last 15% on top of that 20% rise is just pure short covering. I saw the numbers at short analytics and if i recall correctly, it went from ~50-60% daily short to 30-35% over the past 3 days. That says "massive cover" to me.

Looking at SCTY from purely a short-term trading view, here are some thoughts:
1. Next 5 days - difficult to say. Usually after a big squeeze like this, you usually get some profit-taking but SCTY held strong into the end of week. Shows that there was still buyers. Also, completely possible that the Silevo acquisition changes the equation for fund managers (adds additional value). It's possible we see funds acquiring SCTY and that pushes the stock even further.

2. Next several weeks - technicals look very, very good. SCTY had formed a base in recent months and this gives the foundation for a move up if there's a catalyst (which the Silevo acquisition was). The breakout move was on high volume. It's possible that this past week's breakout was a pocket pivot and in the next few weeks we see SCTY in the 70s and higher. Once it gets to the mid-70s, people will be talking about ATHs being in reach (88.35).

Currently the markets are in an uptrend. Momentum/growth stocks are in an uptrend. This really isn't a market to short these stocks. Rather, the higher probability move for the short-term trader is to buy on pullbacks and sell when it's extended. Follow the trend, not fight it... until the trend is over.

 

[ckessel]

I had both short $11 calls and short $11 puts, so it worked out perfectly for me

Presumably at different times? Are you typically selling puts when the stock is low and calls when it's high (relative to highs/lows the last few months)?

JASO hasn't worked out too well for me. Being completely flat for 6 months has definitely hurt. Lost maybe 35% I guess on what I thought were far enough out options at the time that it'd move at least a little. I'll be buying back on what seems to be regular dips towards 9ish...or more likely I'll miss out completely as it goes roaring off never to be seen again.

 

[Mario Kadastik]

Not sure I understand your choice of strike price. Your buying calls because you believe stock is going up and your still trailing the actual price. Your best investment would lead the price not trail it

Most solar options have huge premiums so buying OTM contracts makes the break even point at a terribly high price so it'll be hard to break even. Therefore I prefer slightly ITM options. However my SPWR LEAPs had gotten deep ITM and were basically tracking with a delta on 1 so I preferred to get the same leverage with higher strikes, but with slightly more contracts, but with the same delta. If SPWR moves up some more (i.e. 45 or so) I'll move up again cashing out some profit in between.

- - - Updated - - -

mario, did you go $ for $ (i'm assuming not, since you pocketed money) or did you #of contracts for #of contracts?

I went delta for delta So I got 33% more contracts on the 2015 and 25% more contracts on 2016 LEAPs. At the same time I pocketed ca 20% of the cash.

 

[mershaw2001]

Presumably at different times? Are you typically selling puts when the stock is low and calls when it's high (relative to highs/lows the last few months)?

JASO hasn't worked out too well for me. Being completely flat for 6 months has definitely hurt. Lost maybe 35% I guess on what I thought were far enough out options at the time that it'd move at least a little. I'll be buying back on what seems to be regular dips towards 9ish...or more likely I'll miss out completely as it goes roaring off never to be seen again.

No, he's short a straddle at 11. Given sleepy's style, I'd guess he legged into it, opening up the short puts about a month or two ago and recently opening up the short calls this past week. The play is all about option decay, and sleepyhead- nicely done! In response to your story about 0.01 -in the money short calls not being assigned, let me tell you another story that I think makes the opposite argument:

There was a failed lawsuit against a brokerage house because the guy bringing the lawsuit, the client, had bought far out of the money GOOG calls cheaply, I think 10 of them. It's early on friday and he sees that google is 40 dollars out of the money, so he goes on vacation. Well, google spikes 40.38 in the last hour of the day, putting him 0.38 in the money and he didn't bother to check his account that weekend because he was on vacation so he gets automatically exercised.

So he gets 1000 shares of google, like $600,000 purchased in his account (price was like 600 at the time), gets a margin call and on monday google opens back where it was-40 dollars lower, so they sell him out at a loss of 40*1000=40,000. So he sued, and lost I think. I'm pretty sure it's a true story.

So I don't want to be short a call that's 1 penny in, get the short stock position when it gets assigned, and then wake up another solar pop.

 

[chillong]

Last week I sold some JASO June 11 covered calls (terrible timing). I bought back most of them, but let a few run because I am overweight on JASO anyway and did not mind if some shares would have been called away. As JASO finished on 11.01, 1k shares have now been called away. I really do hope there is no pop on monday

 

[sleepyhead]

No, he's short a straddle at 11. Given sleepy's style, I'd guess he legged into it, opening up the short puts about a month or two ago and recently opening up the short calls this past week. The play is all about option decay, and sleepyhead- nicely done! In response to your story about 0.01 -in the money short calls not being assigned, let me tell you another story that I think makes the opposite argument:

There was a failed lawsuit against a brokerage house because the guy bringing the lawsuit, the client, had bought far out of the money GOOG calls cheaply, I think 10 of them. It's early on friday and he sees that google is 40 dollars out of the money, so he goes on vacation. Well, google spikes 40.38 in the last hour of the day, putting him 0.38 in the money and he didn't bother to check his account that weekend because he was on vacation so he gets automatically exercised.

So he gets 1000 shares of google, like $600,000 purchased in his account (price was like 600 at the time), gets a margin call and on monday google opens back where it was-40 dollars lower, so they sell him out at a loss of 40*1000=40,000. So he sued, and lost I think. I'm pretty sure it's a true story.

So I don't want to be short a call that's 1 penny in, get the short stock position when it gets assigned, and then wake up another solar pop.

That is exactly correct on the timing. I sold the JASO $11 puts initially for May expiration and rolled them to June $11; on Friday, I rolled them to July $12's (although I probably should have just let them expire). I then sold some $11 June calls a couple weeks back for $0.20 and then sold some more on Tuesday or Wednesday for $0.46 when JASO was at $11.29. I knew that the MM would bring it back down below $11 for OE.

I don't really recommend selling puts because it ties up a lot of capital. I sold them thinking that they will expire worthless in May and that if I was wrong and JASO went down, then the capital I preserved (that is restricted due to short puts) will be available to go long JASO on weakness. Unfortunately it doesn't work this way, since as JASO goes down, the margin requirement goes up and more capital gets tied up. Selling puts is only good if you really want to buy stock, but don't like the current price it is trading at.

I can believe the Google call option story, and quite frankly that guy was a dumbass for suing, because it was a slam dunk case for the brokerage and there was no way that this guy was going to win the lawsuit. You have to be really careful when dealing with options on OE day. Even if your short options expire worthless, someone can still exercise them against you if there is some big after hours movement. E.g. you are short $11 JASO put options, and JASO finishes $11.01. Your options expire worthless and all is good; but the option holder has up to 5:30pm EST on Friday to call his brokerage to exercise if something were to happen. Let's say that some news broke out and JASO tanks to $9 in after hours. The person who bought your puts could call his brokerage on Friday and exercise his $11 puts while simultaneously buying the stock for $9 in AH; to capture the $2 spread. Since you are short puts, you will have to buy the stock for $11, even though it is only worth $9 right now. Have to be very careful, and this is a very real risk.

Going back to my situation, I would not want to risk holding my $11 short JASO call, but wouldn't mind risking holding my short $11 JASO puts. I don't mind buying the stock at $11, but would not want to short it at $11. So closing out or rolling the short calls was a must for me, but holding the short puts would not have been a risk to me at all (since I had cash to buy the stock if necessary, and wouldn't mind buying it for $11 anyway).

 

[mershaw2001]

That is exactly correct on the timing. I sold the JASO $11 puts initially for May expiration and rolled them to June $11; on Friday, I rolled them to July $12's (although I probably should have just let them expire). I then sold some $11 June calls a couple weeks back for $0.20 and then sold some more on Tuesday or Wednesday for $0.46 when JASO was at $11.29. I knew that the MM would bring it back down below $11 for OE.

I don't really recommend selling puts because it ties up a lot of capital. I sold them thinking that they will expire worthless in May and that if I was wrong and JASO went down, then the capital I preserved (that is restricted due to short puts) will be available to go long JASO on weakness. Unfortunately it doesn't work this way, since as JASO goes down, the margin requirement goes up and more capital gets tied up. Selling puts is only good if you really want to buy stock, but don't like the current price it is trading at.

I can believe the Google call option story, and quite frankly that guy was a dumbass for suing, because it was a slam dunk case for the brokerage and there was no way that this guy was going to win the lawsuit. You have to be really careful when dealing with options on OE day. Even if your short options expire worthless, someone can still exercise them against you if there is some big after hours movement. E.g. you are short $11 JASO put options, and JASO finishes $11.01. Your options expire worthless and all is good; but the option holder has up to 5:30pm EST on Friday to call his brokerage to exercise if something were to happen. Let's say that some news broke out and JASO tanks to $9 in after hours. The person who bought your puts could call his brokerage on Friday and exercise his $11 puts while simultaneously buying the stock for $9 in AH; to capture the $2 spread. Since you are short puts, you will have to buy the stock for $11, even though it is only worth $9 right now. Have to be very careful, and this is a very real risk.

Going back to my situation, I would not want to risk holding my $11 short JASO call, but wouldn't mind risking holding my short $11 JASO puts. I don't mind buying the stock at $11, but would not want to short it at $11. So closing out or rolling the short calls was a must for me, but holding the short puts would not have been a risk to me at all (since I had cash to buy the stock if necessary, and wouldn't mind buying it for $11 anyway).

I guess whether you hold the calls or the puts short is all dependent on whether you believe in the "long term story" of the company. I have been tossing over in my head whether the solar pop will be faded over the next few months, or if the Iraq issues were just a catalyst that was needed to bring solar back in line with a more fair value, not oversold.

In regard to your 5:30 pm comment- is that brokerage specific, and is that Option-expiration-date specific? In talking to a fidelity representative, i had the impression that weekly (not monthly) options have a different time for the last chance phone-call to exercise. I thought that weeklies had till 4:30, and monthlies had until much later, but the discrepancy could be that we are at different brokerages. I also was wondering if it's possible to choose to exercise all the way until saturday at noon. i have only read some of the CBOE booklet and haven't come across a hard and fixed time yet.

 

[tigerade]

SunPower is piloting home battery storage with KB Home:

SunPower and KB Home Partner on Home Energy Storage Solutions - Jun 24, 2014

With energy storage capability, homeowners with solar power systems and home system monitoring today can control their electricity costs and have the security of knowing they'll have power during an outage. In the near future, battery storage will help homeowners manage energy loads using stored power, including charging electric vehicles at night," said SunPower CEO Tom Werner. "KB Home is once again demonstrating leadership with this move to show how homeowners could use this state-of-the-art technology to take even greater advantage of their high-performing SunPower solar power systems." SunPower and KB Home are piloting the energy storage solutions this year in select KB Home communities in Irvine, El Dorado Hills, and San Diego, Calif., with the potential for a broader rollout to additional communities next year.
"Offering our new homebuyers highly advanced energy-efficient features is a key differentiator for KB Home, and we are proud to partner with SunPower to pilot the energy storage solutions," said Dan Bridleman, senior vice president of Sustainability, Technology and Strategic Sourcing for KB Home. "Showcasing this cutting-edge technology speaks to the strength of KB Home's partnership with SunPower and once again demonstrates KB Home's forward-thinking approach to new home innovation."
One of the first KB Home locations to participate in SunPower's energy storage pilot program is the builder's Vicenza at Orchard Hills in Irvine, a community where all KB homes will include SunPower solar power systems.
KB Home estimates that at current residential electric rates, a 1.4-kilowatt high-efficiency photovoltaic system provided by SunPower and installed as a standard part of a 3,654-square-foot, ENERGY STAR® certified home at Vicenza would yield average energy savings of $216 per month, or approximately $25,900 over ten years, compared to a typical resale home without these features.

View attachment 52224

 

[hcsharp]

SunPower is piloting home battery storage with KB Home:

KB Home estimates that at current residential electric rates, a 1.4-kilowatt high-efficiency photovoltaic system provided by SunPower and installed as a standard part of a 3,654-square-foot, ENERGY STAR® certified home at Vicenza would yield average energy savings of $216 per month, or approximately $25,900 over ten years, compared to a typical resale home without these features.

How on earth are they going to save the homeowner $216/mo with a 1.4kW system? The sun must shine 24 hrs a day in Irvine.

 

[palmer_md]

How on earth are they going to save the homeowner $216/mo with a 1.4kW system? The sun must shine 24 hrs a day in Irvine.

You clearly don't pay CA electric rates. We only need 8 hours of sun since our rates are 3x the rest of the country.

 

[hcsharp]

You clearly don't pay CA electric rates. We only need 8 hours of sun since our rates are 3x the rest of the country.

We pay about .16 /kWh 24/7 in VT. If you install solar with net metering you are not allowed to have TOU rates. Are you saying the hrs that the sun is shining you pay about .48/kWh? That would be highway robbery.

 

[FANGO]

We pay about .16 /kWh 24/7 in VT. If you install solar with net metering you are not allowed to have TOU rates. Are you saying the hrs that the sun is shining you pay about .48/kWh? That would be highway robbery.

Top rate with SCE I think is somewhere in the 35-40 cent range? It's on a tier scale depending on your usage but almost every home is in tier five...even with no A/C as is the case in my home.

 

[dalalsid]

How on earth are they going to save the homeowner $216/mo with a 1.4kW system? The sun must shine 24 hrs a day in Irvine.

$216/mo is outrageous as a power bill for a 3600 sq ft house anyway. What are they made of, black paper?

 

[InTheShadows]

$216/mo is outrageous as a power bill for a 3600 sq ft house anyway. What are they made of, black paper?

There is an EV in the garage.

I see average $200 electric bills in our area all the time for homes with much less than 2200 sqft. Heating season has much more of an impact in my area than ac does.

Plus you get people with 5 tv's a few cable boxes, video game systems, computers, routers, iPads, cell phones, an old beer fridge in the garage and it all adds up really quickly. Oh yea, can't forget the pool and hot tub.

 

[AlMc]

There is an EV in the garage.

I see average $200 electric bills in our area all the time for homes with much less than 2200 sqft. Heating season has much more of an impact in my area than ac does.

Plus you get people with 5 tv's a few cable boxes, video game systems, computers, routers, iPads, cell phones, an old beer fridge in the garage and it all adds up really quickly. Oh yea, can't forget the pool and hot tub.

add two reef aquarium systems and high ceilings and you are desribing my home. Ashamed to admit my electric bill in the sumners can be $350 easily

 

[Johan]

My monthly average over the whole year is about $600. More in the winter. That's about 50k kWh per year. An electritiy is dirt cheap in Norway compared with most other things.

 

[dalalsid]

There is an EV in the garage.

I see average $200 electric bills in our area all the time for homes with much less than 2200 sqft. Heating season has much more of an impact in my area than ac does.

Plus you get people with 5 tv's a few cable boxes, video game systems, computers, routers, iPads, cell phones, an old beer fridge in the garage and it all adds up really quickly. Oh yea, can't forget the pool and hot tub.

Isn't the house in question new construction in CA? Also before solar, you would hope that new construction would use better insulation, good windows, make sure everything is sealed right etc. I guess I can't compare with mine easily with only three people, 2300 sq ft in VA with a Leaf at marginally over half that. This is Irvine - http://www.weather.com/weather/wxclimatology/monthly/graph/USCA0517 - they wouldn't need much heating/cooling at all for a well insulated house.

Oh and no pool

 

[Lessmog]

Also no pool. 5 year old house, triple glazing, electric heat pump, heat exchanger on ventilation, large windows letting in much sun even in winter. We use about 8 GW a year. Although we bathe sparingly, but that's OK because it's always windy here on the Swedish west coast. Partake most meals in the glazed veranda Feb - Nov.

Also, no EV - yet. Still saving up.

EDIT: Almost forgot, thinking about putting some solar on part of the roof, like 5 kW.

 

[hcsharp]

$216/mo is outrageous as a power bill for a 3600 sq ft house anyway. What are they made of, black paper?

They weren't talking about your total electric bill, just the "savings" of $216/mo. Regardless, it's a crock of BS. Unless the sun shines 24/7 for 365 days a year, or the rates are .45/kWh or more the entire time the sun is shining, you can't save that much with a 1.4kW system.