Arabic version: ارتفاع خيارات الطاقة الشمسية قبل نتائج انتخابات التجديد النصفي

According to Cnbc, options traders increased activity in clean-energy stocks, especially solar companies, as prediction markets priced in a big Democratic victory in Tuesday’s midterm elections. Investors often categorize the group as beneficiaries of left-wing leadership, even after a five-month sell-off left most companies in the industry group down for the year.

Volume in the Invesco Solar ETF, known as TAN, rose to 40 times its usual level on Tuesday, based on Cboe LiveVol data. The fund had typically traded fewer than 500 contracts a day during the past month, but more than 20,000 contracts had traded by midday. Calls accounted for 99% of that volume. TAN rallied more than 400% from its pandemic low through the 2020 election, before giving back almost all those gains by April last year.

The most popular TAN trade was the purchase of the 50-strike call expiring in December for 80 cents, seeking a 17% rally, according to SpotGamma data. Calls with 46 and 47 strikes for nearer expiry were also popular. SolarEdge Technologies was on pace for volume three times higher than average, with calls making up more than 75% of its trading. SolarEdge, which reports earnings before the bell tomorrow, rose more than 6% Tuesday. Its most popular trade was the 35-strike call expiring Friday.

Charlie Moon of Chicago-based Prosper Trading Academy said, “I would only like solar if blue was in the White House.” He added that Enphase Energy stood out because of insider buying. Enphase shares had fallen 20% after earnings last week, then fully recovered and rallied 9% Tuesday. On twice-average volume, traders likely bought 8,600 calls compared with fewer than 900 puts. The most popular Enphase trade was the January 35-strike call, costing $2.45 per contract and requiring a 23% rally.