Bullish position extended on SINA


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Sina has been on a tear lately, and one investor is looking for more gains.

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.

SINA 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 activity.

(Chart courtesy of tradeMONSTER)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Options
Referenced Stocks: SINA

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