As the prediction market bets that the Democratic Party will win a big victory in Tuesday's midterms, traders are increasing their positions in stocks that are generally seen as benefiting from a left-leaning leadership.

Clean energy stocks, particularly options trading in solar companies, saw a surge on Tuesday, despite the sector having been on the sell side for five consecutive months, resulting in most companies in the industry still being in a downward trend this year.

According to Cboe LiveVol data, the trading volume of Invesco Solar ETF ( TAN ) soared to 40 times its usual level on Tuesday. In the past month, this fund typically traded less than 500 contracts per day, but by noon, it had traded over 20,000 contracts, of which 99% were call options. The value of ETF rose all the way from the lowest point during the pandemic to the period around the 2020 presidential elections, with a cumulative increase of over 400%, but by last April, it had almost lost all of that gain.

According to SpotGamma data, the most popular trade on TAN was the purchase of a call option with a December expiration date, an exercise price of $50, and a premium of 80 cents. Traders bet that the price would rise by 17%. For contracts with more imminent expiration dates, call options with exercise prices of $46 and $47 were also very popular.

Among the individual stocks, SolarEdge Technologies stands out particularly, with its trading volume expected to exceed three times the average level. Moreover, over 75% of the transactions are concentrated on call options. The company will release its financial report before tomorrow's opening market, and its shares rose by more than 6% on Tuesday. The most popular transaction was the purchase of a call option with an exercise price of $35 that expires this Friday.

Chicago's Charlie Moon means: 'I would only be optimistic about solar stocks if the White House were part of the blue camp. However, Enphase has indeed stood out due to some purchases by insiders.'

Indeed, that is the case. Traders have been making exploratory moves on Enphase Energy. After the company's financial report last week, the stock price fell by 20%, but it has since fully recovered its losses, rising by 9% on Tuesday. With trading volume reaching twice the average level, traders may have purchased 8,600 call options, while there were less than 900 put options bought.

Enphase The most popular trade is to buy a call option with an expiration date in January and an exercise price of $35; calculated at $2.45 per contract, this trade requires a 23% increase to be profitable.