RUN hedged options strategy

6 ene 2023

There are lots of bullish arguments to make for solar stocks this year, including the Inflation Reduction Act and global demand, especially in Europe. California-based Sunrun designs, installs, sells and maintains residential solar panels directly to customers. Other business areas include battery storage, leasing energy services, and a "virtual power plant" with installed Sunrun panels actually exporting energy back to the grid. Relatively few homes have solar panels installed, but homeowners are increasingly interested in them and associated tax benefits, making growth potential in this area of the clean energy market quite high.

Technically-minded traders might also wonder if RUN stock will repeat its falling wedge pattern, and possibly even see a double bottom forming. On the other hand, with over $5 billion in debt (as of March 2021) and Fed interest rate hikes adversely affecting tech and growth stocks, is Sunrun the safest place to park money right now?

This hedged options strategy protects from a fall of up to 32% as of 8/18/23 and also makes up to 25% (44% annualized).

Buy 1 $20 call
Sell 1 $27.50 call
Sell 2 $15 put
Expiring Aug 18, 2023

Capital requirement: $2994