Option Traders Are Looking for a Rebound in Trina Solar

NEW YORK -- Trina Solar (TSL) has gotten hammered, but option traders are looking for a rebound from long-term support levels.

OptionMonster's Heat Seeker system detected the purchase of about 3,900 January 9 calls Monday, most of which priced for 27 cents to 30 cents. The volume was more than triple the previous open interest in the strike, showing that new money was put to work. 

These long calls lock in the price where investors can buy shares in the green-energy stock, gaining in value if shares rally. The relatively low cost of the options limits the amount of capital at risk if the stock declines. 

TSL rose 2.96% to $8.36 and is trying to bounce near the same level where it peaked in July and early August of 2013. The Chinese company trades for less than book value and has short interest of about one-quarter the float, which could also draw buyers to the name. 

Total option volume in Trina was quadruple its daily average in the session, with overall calls outnumbering puts by more than 16 to 1. 

-- Written by David Russell of  OptionMonster 

Russell has no positions in TSL.

More from Options

Here's a Better Way to Hedge Using Stock Options

Here's a Better Way to Hedge Using Stock Options

Let the Najarian Brothers Crash-Proof Your Portfolio

Let the Najarian Brothers Crash-Proof Your Portfolio

Let the Najarian Brothers Help You Generate Income With Options

Let the Najarian Brothers Help You Generate Income With Options

Learn Options Trading from the Najarian Brothers, the Best in the Business

Learn Options Trading from the Najarian Brothers, the Best in the Business

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO