Bulls are looking to ride Qihoo 360 higher

By David Russell,

Shutterstock photo

Qihoo 360 Technology had a very successful IPO last month, and the bulls are positioning for more upside.

optionMONSTER's Heat Seeker tracking system detected unusual call volume in the Chinese software company, which provides Internet-security and anti-virus programs. It has more than doubled since going public at $14.50 a share on March 30.

The May 30 calls mostly fetched $2.50 to $2.90 and the May 35s went for $1.30 to $2. More than 2,200 contracts changed hands between the two strikes, with purchases accounting for most of the activity.

QIHU rose 1.10 percent to $29.42 on Friday and has been consolidating its big gains in the last three weeks. The company seems to be benefiting from wave of bullish sentiment in Chinese Internet stocks after investors have gotten rich on names such as Baidu, Sina, Sohu.com, and Netease.com.

Traders also sold about 1,300 April 30 calls in QIHU on Friday to earn income before expiration. Some priced for $0.75 to $1 when the stock was above $30, but then expired worthless when it pulled back later in the session.

Overall option volume in the name was 16 times greater than average, with calls outnumbering puts by 6 to 1.

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: QIHU

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