Chinese e-commerce company 58.com has been ripping, and the
bulls are looking for more.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of almost 2,900 August 55 calls for $3.90 and the sale of
2,250 July 45 calls for $7.20. Volume was below open interest in
the 45s, which suggests that an existing long position was closed
and rolled forward in time.
lock in the price where investors can buy a stock, which lets them
profit from a rally with limited cost. Capital can be swapped from
one contract to another as shares advance, which lets traders take
money off the table while staying in the trade. (See our
WUBA rose 5.13 percent to $54.90 on Friday and has more than
tripled since its initial public offering in October. The company
gapped higher on a strong quarterly report in late February and
followed with more positive numbers in May. Guidance was greater
than consensus on both occasions as well.
The company is based in Beijing and focuses on connecting local
merchants with customers. Its stock ticker "WUBA" is an approximate
rendering of the number 58 in Chinese.
Overall option volume was 16 times greater than average in the
session, according to the Heat Seeker. Calls accounted for a
bullish 93 percent of the total.
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