Category Archives: FSLR

Sun and Wine

The ongoing spat between China and Europe is heating up. In response to Europe imposing tariffs on Chinese solar panel manufacturers, China has started to target  (“investigate”) southern European Wine Exports. Now, here in France that’ll touch a nerve, just when we finally get some sun.

Interesting. There’s a bit of deja vu here.

Europe claims Chinese manufacturers of solar panels are selling them below manufacturing cost, in other words, they’re dumping their product on Europe and killing local manufacturing. The European commission is claiming 25, 000 jobs are at risk without the imposed tariffs. Jobs are something Europe needs desperately. In the press there’s conflicting information on the real tariffs. Obviously, they’re in serious posturing/spin mode. Bloomberg, says tariffs as high as 67.5%, Reuters is reporting that they’ve created a ‘initial duty’ of 11.8%.

Last October the US Commerce Department did essentially the same thing (New York Times). Solar has been a political hot potato for the Obama administration. It surprises me that China wasn’t more sensitive to this risk, if they are in fact dumping. So almost a year later they’re taking on Europe. Or Europe has decided to react, depending how you look at it. In either case, it’s a very aggressive stance, and a bigger deal than most people realize.

This US-China Market Review from last Spring, articulates the strategic importance that China places on its Solar Industries.

China is prepared to invest RMB 3 ($480 billion) in the clean energy and energy conservation/environmental protection sectors over the next five years.

As well as its agressive stance:

To hold an advantageous position in future international competition, we must accelerate the fostering and development of strategic emerging industries, control the key and core technologies and related intellectual property rights, and enhance our capability for independent development.

It looks to me like China’s success has been putting pressure on both the US and Europe. Is it possibly the West has failed to innovate around renewable energy and now they’ve decided to rely on protectionist tariffs? Throw in the towel? If that’s the case, it’s hypocritical at best.

Or is China being too aggressive and dumping product to secure a monopoly in renewable energy? They’ve staked these industries out as strategic, and have admittedly a cancer causing reliance on Coal and Oil. I can see why China’s investing heavily. I can also see why they’re fuming. But hitting French wine…

I’ve been intrigued for a few years with solar companies, you can see my early posts on First Solar. So considering the latest spat, I was wondering if Chinese solar companies are trading differently than, First Solar (FSLR) for example.

FSLR-SOL-JASOThe answer is: not really.

So is there a trade here? It’s worth thinking about…

FSLR Iron Condor

A relatively large October Iron Condor was bought on $FSLR this morning.

65/70/90/95

Looks like the volume was 2500 Contracts and the buyer is betting $FSLR will close between 70 and 90 by October expiration for a credit of ~ 2.60.

I like this trade.

Post Vacation Surprises

One relaxing week in the heartland of France did more good for my portfolio than I’d expected. Though I knew the wine would be good, the company excellent, and the sites spectacular; I’m relieved the market pulled back strongly. The recent option plays I’ve written about have done surprisingly well and only regret not playing the positions more agressively:

Now that the pissing match in Washington has concluded as expected… (See July 28th Post). I simply remain disgusted with our elected officials, just more so. The best tag-line I’ve seen has to be: “Did Sarah Palin’s “Hells No” Call The Market Top?” Funny. Stupid, but Funny.

It’s now time to move on to other dramas. Europe is still on vacation, for at least two more weeks I expect we’ll only see Press Release/Talking Head market conversation and very little “real” information. Even with the ECB bond buying, weakness is likely to prevail for the remainder of August. That’s my sceptical view, in any case. Italy might not be as bad as panicky investors are imagining. This article on VOX seems fairly written. The slide continues, though the Euro is showing surprising resilience.

I’m still holding the SPY Butterfly but have closed the other positions.

If you want to buy a nice pad in NY, let me know. Upper East Side, 2 blocks from the park, great kitchen!

I’ll be updating during the day, happy to be back!

FSLR Breaking?

What is the First Solar, Inc. (FSLR) earnings trade?

This chart caught my attention with a trigger at 121.41. There are two interesting channels both suggesting downward movement. Earnings will be released Thursday; with a 36.75% short float and bullish analysts, I’m sceptical… Who’s playing both sides on $FSLR… ??

Volatility jumped 9.9% today with option traders expecting atleast a 5% move in the stock.

The Wall St. Cheat Sheet has a decent  summary of expectations.


FSLR