Alternative Energy Investor Discussions

[Mario Kadastik]

To regularly get big gains you have to have a strong stomach and buy instead of sell in some downturns. Also, trying to hope for recovery is a bad strategy, you should define what your exit strategy is or action on what you are playing the options game. If the game's going in a different direction than you planned then exercise your exit strategy taking the loss. Hoping and keeping going will most of the times give you worse losses than you had originally (learned through tough situations over the years). Then again if the market is evaluating the options cheaper and cheaper while your crucial event (i.e. ER or similar) hasn't happened yet, then this is a good buying opportunity to reduce your entry price, it's also good to be disciplined and sell the excess contracts once they reach profitability because they're outside your original strategy.

Also trying to keep the investment small (a few hundred bucks) is going to be tough and set an artificial limit that will make you cramp up and therefore miss opportunities and set you up for more likely failure. You'll choose further OTM options to get them cheaper and you will not buy additional ones therefore not being able to leverage. Also, being able to get maximum clearance to the market is essential so that you can hedge etc. If happiness comes fast don't keep hoping, hedge locking in the profit

 

[sleepyhead]

When i first started learning i ran into much of the same Clemsons. I too was down some 50% at one point, lucky at that time have very little in my options account because i knew i was just learning. the final straw of that hit came on the GS "upgrade" of Tesla. Since they i have played longer options and safer ones. I still play some short term earnings here and there and seem to get bit every time. But i play with small amount of house money that i am ok with especially gambling. I have listened to sleepy and i take my time with any options i purchase if the sum of money is over $500. I still play some feeler options with small capital (Under $500) Only one has really paid off (Thanks FB!)

If your just getting into options due to the lore of high reward on small amount of cash. be smart and play options like stock. Stick with long term, ITM or Close OTM calls. The % gain might not be as big as many other plays, but that is because they are much safer.

Dont blindly fallow like sheep. Make your own informed choices. Dont go play every solar cuz solar is the "it" thing to do. Some of these solars are still in real danger of going under.

Great advice. And I would like to add that the solar companies are in real danger of going bankrupt. I don't see it happening at all (at least the companies I like), but that is just my personal opinion and I could be dead wrong.

CSIQ closed above $22. It just keeps going up. Good luck to those who are waiting for a pullback to get in. Honestly, I hope you guys never get your pullback, but we all know that there will be one eventually. CSIQ is going to become the gold standard of Chinese solar companies and dethrone TSL. They are copying SPWR's business model and it is a very smart thing to do. Q3 should be really, really good. Now that it looks like congress will settle this mess tonight, look out for a potential earnings preannouncement (speculation on my part).

SCTY went up really strong today +12%. I really wanted to buy some weekly options on SCTY the day after the huge run up. But then I looked at the Oct $50 calls on Tuesday when SCTY was just above $45 and they were going for something crazy like $1. Even though I knew SCTY would continue its run (you don't announce huge news like that only to have a one day run up followed by pullback and/or consolidation) there was no risk reward in buying options since IV was so high.

SPWR has been going really strong on no news. This can only mean one thing: the market is finally starting to realize that solar is about to explode. Yes/no/maybe so?

SOL and JASO have been lagging big time. If you are looking for a longer term investment that has potential to double or triple at any time then look no further. These stocks are really cheap right now and might have the best risk reward profile.

JKS as I expected hit the $25 resistance and is now consolidating. Don't be fooled by this, because it is a very strong company that might post some really good earnings this quarter and basically every quarter in the foreseeable future; just like CSIQ.

TSL and YGE - I don't follow these stocks, because there are too many analysts following them. They will probably continue going up, but they already have the highest market caps and IMO do not deserve it compared to CSIQ. Yes, TSL is still undervalued (can't say that for YGE with its huge debt load), but IMO CSIQ should have a higher market cap than TSL. CSIQ will have more revenune, more profit, has power plant experience, is now entering residential in US. TSL has none of this.

Right now I like CSIQ, JASO, and JKS/SOL in that order.

Good luck to all and please do some research before blindly following my opinions. I could be extremely wrong in my assumptions.

Happy Investing!

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To regularly get big gains you have to have a strong stomach and buy instead of sell in some downturns. Also, trying to hope for recovery is a bad strategy, you should define what your exit strategy is or action on what you are playing the options game. If the game's going in a different direction than you planned then exercise your exit strategy taking the loss. Hoping and keeping going will most of the times give you worse losses than you had originally (learned through tough situations over the years). Then again if the market is evaluating the options cheaper and cheaper while your crucial event (i.e. ER or similar) hasn't happened yet, then this is a good buying opportunity to reduce your entry price, it's also good to be disciplined and sell the excess contracts once they reach profitability because they're outside your original strategy.

Also trying to keep the investment small (a few hundred bucks) is going to be tough and set an artificial limit that will make you cramp up and therefore miss opportunities and set you up for more likely failure. You'll choose further OTM options to get them cheaper and you will not buy additional ones therefore not being able to leverage. Also, being able to get maximum clearance to the market is essential so that you can hedge etc. If happiness comes fast don't keep hoping, hedge locking in the profit

This is great advice as well. You really need maximum clearance to play options to create spreads at will.

 

[Clemsons2k]

I was doing great up until when the market pulled back because of the delayed Washington dealing last week. I would have been set for earnings month and made a nice profit but I just kept catching the proverbial falling knives the last week. I made a couple wrong decisions that cost me a good chunk of money. I sold calls at a loss to hedge with puts (did have any spare capital laying around to buy the puts outright which goes back to the needing more money part I stated earlier), and then the stock never went down again. I should have just held onto the calls and they would be in the green (barely) right now and I'd have a much smaller percentage loss. Just didn't want to lock in losses by exiting all my positions or be uncovered for a market tank due to the looming default deadline.

Chock it up as payment for schooling I guess

Anyways, sorry for the offtopic just feels good to get it off my chest haha.

 

[MikeC]

Quick question - why is "Canadian Solar" a Chinese company?

 

[Mario Kadastik]

Nah, I managed to get my entire portfolio down ca 30-40% in the first year of options trading which was mostly due to two factors:

1) I was using a broker where I called them to make trades and that meant missing out on crucial steps because I couldn't always reach them fast enough and had to contemplate always if it's worth the call or not. Moving to IB platform this February has netted me tons of gains bringing the whole portfolio to green and beyond. Mostly because of pre-defined exit strategies that execute stop losses

2) A couple of extremely stupid hoping for losses. I had defined a strategy post-earnings for Apple and the stock kept going the wrong way. When it then recovered for a moment I could have exited my position with minor profit (or at least exited most of it) I kept going hoping that it'll now recover. It didn't. Same thing happened not too long ago with Netflix where I made the wrong call and instead of exiting kept leveraging even though I knew the original ad-hoc plan had been wrong. That multiplied my loss by a factor of 5.

So now I try to avoid such situations by having to just clench the teeth and take the loss. For example I closed my $195 dec put the moment it touched $31.95 because this way I exited it with 0 loss for the last trade I had made on it reducing my margin requirement by 30% and making me breathe more easily. Of course had I not done that I'd have netted a nice profit by today, but that's not the point I stuck to my strategy.

Today I planned to buy 4 contracts of $185 weeklies to leverage the deal on which I'm expecting a recovery at least to the levels we saw earlier today. As the stock kept slowly going down I bought it up one by one at lower and lower prices (started at $2.8). I had mentally reserved twice the amount for temporary leverage so I kept buying the calls at lower and lower prices when it dropped lowering the total average finally to $2.35. I had planned for sure to sell the extra 4 contracts as soon as the option passed $2.35, but that just barely didn't happen so I planned to take the loss and close out those 4 before market close, but managed to miss it by a few seconds somehow so now I'm sitting on 8 contracts which is not what I had planned originally, but this time it's not my strategic failure, but just technical hiccup that my order didn't materialize on the market before it closed. Oh well at worst I'll be paying some schooling money tomorrow for not closing it earlier than last seconds of the market

 

[Norse]

Quick question - why is "Canadian Solar" a Chinese company?

Factories are in China, tho I think they have a factory in Canada.

However my wish list is for tomorrow is: TSL and JASO, get up! And for CSIQ to pre-announce earning. I bet some companies have been waiting for the debt ceiling and all that to announce.

 

[borat99]

Factories are in China, tho I think they have a factory in Canada.

However my wish list is for tomorrow is: TSL and JASO, get up! And for CSIQ to pre-announce earning. I bet some companies have been waiting for the debt ceiling and all that to announce.

Let's get SOL on the team as well.

 

[Norse]

yeah, higher poly prices benefit them. But Im not sure if its high enough for them to go DAQO.

 

[AlMc]

Quick question - why is "Canadian Solar" a Chinese company?

http://www.canadiansolar.com/en/our-company/about-us/

 

[MikeC]

http://www.canadiansolar.com/en/our-company/about-us/

So it's a Canadian company with factories in China, right? E.g., Apple has factories in China, too, but isn't considered a Chinese company (although I guess FoxConn is a separate company).

 

[brianman]

In your example, one year time frame is not long-term. Even if TSLA goes up for the next 10 years, then there will definitely be periods where people will lose lots of money on call options and some will even get wiped out. If you have highest level of clearance and use sophisticated strategies then you can avoid getting wiped out in the worst of times and fight to live another day, while maintaining most if not all of the upside.

I wasn't suggesting it was long term. In fact, if anything, I was suggesting it is a very short term. My point in that piece of data was frequency of activity.

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Ah indeed I thought the low and high were the call/put values, now I understand you meant the underlying. Yes, buying calls and puts to ride the ups and downs can work, but it has to be relatively short term options.

Good point. I'll do some editing to make it clearer in the original post.

Yes, buying calls and puts to ride the ups and downs can work, but it has to be relatively short term options. I've used weeklies to get nice exposure to such moves. Doing it with long term options is going to be harder, but yes means no need for any actual stock (I in fact have only money and options, no stocks at all).

I find the "headroom" for weeklies to be too tight for my liking. When I buy monthlies "too close" (like, say only 2 weeks remaining) I find that I get more anxious and tend to feel pressure to "seal a small loss" rather than "wait a bit longer for a break even or small gain" when my original instincts mismatched the eventual market activity.

 

[hershey101]

Hi Sleepy,
Quick question. Is it too late to get into SCTY, CSIQ, SPWR and the other solar stocks? They have all head great runs this year so far, but I have been afraid of investing in such small compaines because the stock prices can so easily be manipulated.

 

[sleepyhead]

Hi Sleepy,
Quick question. Is it too late to get into SCTY, CSIQ, SPWR and the other solar stocks? They have all head great runs this year so far, but I have been afraid of investing in such small compaines because the stock prices can so easily be manipulated.

They can be manipulated in the short run, but in the long run they cannot. Plus volume is picking up quickly which means less manipulation.

I can't say anything about SCTY, but I think CSIQ is still a fantastic long-term buy. It has been running hot and could pull back any day. It could also make a positive announcement that will shoot the stock even higher.

SPWR is a hit or miss with the markets, but I am a big believer in their huge long-term potential.

I would definitely buy the solars before Q3. I have no idea what SPWR will do, but I am very confident in CSIQ Q3 results.

The solar industry is only getting started and these might be life changing investments, kind of like TSLA. I have done a lot of research and I like everything I see, it is only a matter of time before these stocks go higher.

When fundamentals start changing in the industry I will definitely let you guys know. But right now everything is getting better for these companies. I would also add some JASO and SOL as well as JKS into your consideration.

Make sure to do some research before investing though.

 

[skandy]

I am stealing this from the Short-Term TSLA Price Movements Thread:

I'm not sure about your thoughts but I know this. I am in the solar industry and solar panel prices have bottomed in q4 2012. Each quarter since then I have received price increases. Also costs to manufacture continue to go down. China is extremely aggressive in solar and will likely dethrone Germany within 3 years as the global leader. Oops I forgot to mention India.

Please help me understand, something does not check out here - why have the solar panel prices have bottomed in q4 2012, given that there are so many manufacturers and their costs still go down? Everything seems to confirm that prices are still getting lower, what is your source?

 

[FANGO]

I am stealing this from the Short-Term TSLA Price Movements Thread:



Please help me understand, something does not check out here - why have the solar panel prices have bottomed in q4 2012, given that there are so many manufacturers and their costs still go down? Everything seems to confirm that prices are still getting lower, what is your source?

What he means is that prices to manufacture panels are getting lower, but that selling prices of completed panels are going up. This is because demand is extremely high. Such that even if you increase supply, you can still raise prices, because demand increases are outstripping supply increases. This also means higher margins for manufacturers, which means more money, which means more EPS, which means higher stock prices.

Think of it like Model S price increases. Tesla has been able to increase the price of the Model S because demand is so high for the car and even though they're increasing production, there are still enough people to buy the cars that even after raising prices they can still max out the factory. There's no guarantee that this will continue forever, but that is similar to the situation in solar right now, I believe, according to theshadows.

 

[Lessmog]

Oh, hi there, FANGO

I am stealing this from the Short-Term TSLA Price Movements Thread:



Please help me understand, something does not check out here - why have the solar panel prices have bottomed in q4 2012, given that there are so many manufacturers and their costs still go down? Everything seems to confirm that prices are still getting lower, what is your source?

Now, I can't speak for TheShadows, but it seems they are in the business of buying panels and state they have seen a steady increase in prices, which have already left the bottom. Why? Maybe increased demand, maybe manufacture consolidation to some degree (?), maybe international tariffs agreements?

Just a wild guess on my part.

 

[skandy]

What he means is that prices to manufacture panels are getting lower, but that selling prices of completed panels are going up. This is because demand is extremely high. Such that even if you increase supply, you can still raise prices, because demand increases are outstripping supply increases. This also means higher margins for manufacturers, which means more money, which means more EPS, which means higher stock prices.

Think of it like Model S price increases. Tesla has been able to increase the price of the Model S because demand is so high for the car and even though they're increasing production, there are still enough people to buy the cars that even after raising prices they can still max out the factory. There's no guarantee that this will continue forever, but that is similar to the situation in solar right now, I believe, according to theshadows.

Thanks for the explanation, FANGO! I actually had no idea that the demand is already bigger than supply. While this is great for manufacturers and for the industry in general, this means that we are not approaching grid parity while prices stay high - but of course this is just a temporary thing until capacity increases or markets get saturated (and we are very far from it).

 

[FANGO]

Thanks for the explanation, FANGO! I actually had no idea that the demand is already bigger than supply. While this is great for manufacturers and for the industry in general, this means that we are not approaching grid parity while prices stay high - but of course this is just a temporary thing until capacity increases or markets get saturated (and we are very far from it).

Grid parity may not actually be all that important in the short-term. If what theshadows is saying (and my interpretation of it) is correct, what this tells us is that consumers are willing to pay "more" for solar than for other energy types, even if we are not at grid parity, because they see long-term benefits from cut costs or independence from the grid or environmental benefits, or because they're taking advantage of subsidies, or because they see social or marketing benefits of being involved in "green" energy, or any number of other reasons.

Of course, as breathers of air and living beings of a moderate-temperature planet, we all want adoption to come at the maximum rate possible, and maybe grid parity would increase that rate. But you're never going to have more solar panels than you can manufacture, and as long as we're working in a capitalist framework manufacturers are motivated by money, so higher margins can do nothing but good.

 

[Mario Kadastik]

Damn, planned to contribute to the solar panels profits by installing some and was looking at the incentives that listed that they cover 70% of the installation costs which got me very happy until I found out that the program has ended because they ran out of support money. Damn... need to invest in solar companies more now to earn enough profit to install a solar system

 

[AlMc]

Damn, planned to contribute to the solar panels profits by installing some and was looking at the incentives that listed that they cover 70% of the installation costs which got me very happy until I found out that the program has ended because they ran out of support money. Damn... need to invest in solar companies more now to earn enough profit to install a solar system

I wanted to put SCTY on my 'small business'....electric bill is $1,500/mo. They are so busy with residential and large businesses that they are not even starting a waiting list for my size business. Must be nice to be too busy!