First Solar’s Sentiment At Elevated Levels

Even though I remain bullish on the market, buying puts, put spreads or diagonals (which can be spanned out in time) is a good way to profit from temporary declines. At present in First Solar, Inc.(NASDAQ:FSLR), momentum indicators are way overbought, sentiment is at highest in 12 months and implied volatility has dropped to 35% ( well below its 12 month average). Many traders do not like debit put spreads or diagonals because they involve a debit from ones account but in periods of low volatility, selling options is not an attractive strategy. Furthermore when volatility is cheap, buying put options are less expensive plus they have infinite profit potential not like when selling a spread instead of buying one.

Overbought

Volatility On The Floor

Sentiment At Annual Highs

About Individual Trader

Helping You Navigate The Markets For Profit
This entry was posted in First Solar and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s