Puts Cast Long Shadow Over SunPower

| About: SunPower Corporation (SPWR)

By Mike Yamamoto

Prospects for SunPower (SPWRA) are dimming among option traders today. More than 4,500 July 17 puts were bought this morning for premiums ranging from $0.80 to $0.95, according to our Depth Charge system. The volume was four times the open interest of 1,100 contracts, so these are new positions.

SPWRA is down 1.08 percent to $21.07 this morning. The stock gapped higher from the $16 level to more than $22 when French energy giant Total (NYSE:TOT) announced that it was offering $1.37 for a majority stake in the maker of solar panels.

But Needham Research lowered its rating on the company to "underperform" on Wednesday, citing lower-than-expected revenue estimates and risks to the company's 2011 earnings. The firm said it expects SPWRA to pull back further after the Total tender offer is completed on Tuesday next week.

Overall SPWRA puts at all strikes outnumber calls by more than 4 to 1. It is the second solar company to see downside option activity in the last week, following put buying in LDK Solar (NYSE:LDK) last Friday.

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Tagged: , Semiconductor - Specialized, Options
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