Options trader Jon Najarian on Thursday recommended taking advantage of the sell-off in solar stocks.
If you're looking for broad sector exposure, consider the Guggenheim Solar Energy exchange-traded fund, said Najarian, co-founder of optionMONSTER.com. The ETF, which tracks a number of solar stocks, is down from $9 to roughly $7 a share. Najarian thinks this ETF is a buy on the pullback.
Najarian also recommends First Solar shares, which he bought at around the $122 level on Thursday. Or, Najarian suggests looking at Trina Solar , which fell 19 percent just in the past few days.
"You had a washout basically going on into yesterday when these things bottomed," Najarian said. "I took advantage of it and did some one-by-two spreads."
Najarian said traders should move quickly on these plays, though.
Many solar companies are reliant on government subsidies, which they risk losing thanks to reduced federal spending in the US and in Germany, too.
Joe Terranova, chief market strategist at Virtus Investment Partners, agreed with Najarian on these trades. He's not sure, however, whether the fundamental story lines up or not.
Watch the video to see the full conversation.
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Trader disclosure: On November 18, 2010, the day this video was recorded, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova owns (UPL), (C), (PEP), (VRTS), (OXY), (GS), (POT), (AAPL), (ORCL), (MCD), (NKE), (IBM); Finerman owns (AAPL); Finerman’s firm owns (GM); Finerman owns (DYN); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's Firm Is Long (GM); Finerman's Firm Is Long (GOOG); Finerman's Firm Is Short (IJR); Finerman's Firm Is Long (JPM) ; Finerman's Firm Is Long Russell Puts; Finerman's Firm Is Long S&P Puts ; Finerman's Firm Is Long (PDE) Call Spreads; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Jon Najarian is Long (BKE); Jon Najarian owns (COP) short calls; Jon Najarian owns (CRM) short calls; Jon Najarian owns (DRYS) short calls; Jon Najarian owns (F) short calls; Jon Najarian owns (FIRE) short calls; Jon Najarian owns (FFIV) short calls; Jon Najarian owns (FSLR) short calls; Jon Najarian owns (DLTR) short calls; Jon Najarian owns (DG) short calls; Jon Najarian owns (WMT) short calls; Jon Najarian owns (FCX) short calls; Jon Najarian owns (FCX) call spreads; Jon Najarian owns (GOOG) call spreads; Jon Najarian owns (LTD) call spreads; Jon Najarian owns (FIRE) call spreads; Jon Najarian owns (GT) call spreads; Jon Najarian owns (GM) converts
For Joe Terranova
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