The bulls are coming back to the China shop, looking for a rally
in e-commerce stock Sina.
Our tracking programs detected the purchase of 10,000 December 80
calls for $1.88 and the sale of 10,000 December 90 calls for $0.78.
There was virtually no open interest in either contract before the
trade appeared, so this is a new position.
locks in the entry price for a stock, while selling them obligates
a trader to unload shares at a certain level if they are above it.
In the case of yesterday's transaction, they have the right to buy
SINA for $80 and then must sell it for $90 if it's over that higher
price. They paid $1.10 for that $10 spread.
SINA closed yesterday at $64.38, up 1.23 percent. Although it would
have to rally about 40 percent to reach $90, the option strategy
would leverage that move into a profit of more than
The stock is trying to rebound from a major pullback that erased
more than two-thirds of its value between April 2011 and July 2012.
The last earnings report on Aug. 15 beat expectations, and
management remained positive on monetizing its Weibo microblogging
Overall option volume was more than triple the daily average in
SINA yesterday, with calls outnumbering puts by 5 to 1.
(A version of this post appeared on
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