>So, the long term play here should be short SPWR and long CY, right?
When it sounds like a sure bet to short SPWR to lock in the rest of CY value, it is a bit complicated to do it. A few alternatives can be considered:
1) Short SPWR: The most direct approach. However, you may short today and be demanded to cover the next day. The short ratio at SPWR is almost 50% floating. It is almost impossible to keep the short (without being recalled) before SPWR secondary.
2) Short naked call: It is still possible be recalled. My June 22.5 call was just called - 4 months before expiration. Thank God, I do have a few SPWR long (trading in-and-out) to be recalled.
3) Buy Sept. 60 put: I guess no one has the right to recall your put. The premium isn't too bad, maybe $1.5.
4) Short whichever solar stocks or even alternative energy stocks you deem over-priced.
Or, you can just sit back, relax. I don't think you need to hedge your entire CY position. CY valuation has plenty of room to offset drops in SPWR.