SolarCity Corp (SCTY) Call Options Get Electrified

Good times today watching all the big call buys come in.  One of the more interesting ones was in  just seen in SolarCity Corp (SCTY) this afternoon.

One trader seems to think that SolarCity Corp (SCTY) is going much higher in the next two weeks.   The trader bought 1358 SCTY August $89 calls. They paid just 82 cents for those calls that expire rather soon.  That makes for a good sized bet with a transaction value of over $111,000.

SolarCity Corp (SCTY) is currently trading at $76.00 up $3.14 or 4.3%, though it is off it’s high of the day of $76.80.  SCTY has a 52 week high of $88.35, and a low of $28.31 on the year.  It’s trading much higher than normal volume with over 4.8 Million shares trading by 2:23 pm today.

Here’s the kicker on this big call buy!  SolarCity Corp (SCTY)announces quarterly earnings today,  August 7, after the close, so you better be prepared for this binary event.  These earnings plays don’t always go as planned, even by the “smart” money.

So what does this trader know that no one else seems to know?  May be some blowout numbers or other material news is “anticipated” to be released in the earnings report?

We like this trade given it’s size, but we kind of missed the boat on this and now the options are at an ask of 91 cents, with last trade at 77 cents.  We’ll definitely keep this one on our watch list and if we get a quick dip in the share price we’ll try to get this in the mid 80’s.  Of course, it will be a very small bet for us.

scty solar city logoTwelve analysts currently follow SolarCity Corp (SCTY).  The average rating on SCTY is “overweight” and the average price target is $81.10.  Analysts expect a loss of 99 cents this quarter, and expect an annual loss of $3.86 per share.  It’s definitely not a pretty financial picture.  There definitely looks to be room for a nice earnings surprise.  The last analyst action was July 25th, when Credit Suisse reiterated it’s Outperfrom rating and raised their price target from $75.00 to $93.00.

Either way, we are interested in SolarCity Corp (SCTY) and will look to jump into these if we can get it in at 85 cents.

Good luck with this coin flip on Solar City.