Sina has been on a tear lately, and one investor is looking for
optionMONSTER's Heat Seeker tracking program detected the purchase
of about 5,500 December 65 calls for $3.10 and the sale of about
5,900 November 55 calls for $8 against existing open interest.
The transaction apparently resulted from an investor rolling a long
position in the Chinese Internet company to the higher strike. The
move let the trader recover about $5 of principal while obtaining
another month of upside exposure.
SINA fell 0.93 percent to $62.02 in morning trading but is up 23
percent in the last month. It's been rallying as investors come to
appreciate the promise of its fast-growing but nascent
microblogging business known as Weibo.
The company operates general-interest Web sites, similar to Yahoo
in the U.S. It was mostly ignored for years as traders instead
focused on search engine Baidu, China's version of Google.
Recent price action suggests that sentiment is now shifting in
favor of SINA, which trades at much cheaper multiples. Not has BIDU
lagged since Nov. 1, but option traders have also started selling
calls on the better-known company. That marks a sharp change from
the pattern in August and September, when BIDU saw heavy call
buying and put selling.
SINA is also scheduled to report third-quarter results after the
bell on Nov. 16.
Overall option volume in the stock is 5 times greater than average
so far today, with calls accounting for a bullish 93 percent of the
(Chart courtesy of tradeMONSTER)