Calls bet SunPower will shine again

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As SunPower tries to recover from a sharp drop last week, traders are betting on a return to recent highs.

optionMONSTER's Heat Seeker system identified heavy buying in the November 34 calls as more than 6,000 contracts traded for $0.37 to $0.61, including a print of 3,288 purchased for the ask price of $0.42. The volume was well above the strike's previous open interest of 1,242 options before the session began, indicating that new positions were established.

These long calls lock in the price where traders can buy the stock through mid-November no matter how far it might climb. But if shares remain below $34, the options will expire worthless in about two weeks. (See our Education section)

SPWR rose 2.2 percent on Friday to close at $30.87. The stock gapped down from the $32 in the previous session after the solar-energy company beat forecasts on the top and bottom lines for the third quarter but issued earnings guidance that fell short of analysts' expectations. Shares had hit resistance around the $34 level before the report.

SunPower management will present at the Baird 2013 Industrial Conference on Monday. Solar stocks have been on scorching run, with the group tripling in the last year, according to our researchLAB market-analysis tool.

Total option volume in the name topped 19,800 contracts on Friday, nearly 40 percent higher than its daily average for the last month. Overall calls outpaced puts by about 3 to 1.

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