Trader sees more upside in Focus Media

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The bulls think that the good times in Focus Media have only just begun.

optionMONSTER's Heat Seeker tracking program detected a surge of call activity in the Shanghai-based advertising company, which owns digital screens in public areas throughout the Chinese mainland.

Some 6,000 April 20 calls traded for $9 and $9.15, apparently sold. Volume was below open interest, which suggests that an existing position was closed. At the same time, 9,000 April 30s were bought for $4.10 and $4.20 in a new opening trade, producing a credit of about $1.7 million.

Together, this suggests that the investor had entered the calls when FMCN was lower. He or she has now made a big profit and is rolling the position up to the higher strike. The trader also increased the number of contracts, which will provide more leverage to a continued rally.

FMCN is up 6.79 percent to $26.59 in midday trading and has gained about 60 percent from the beginning of the month. The stock fell hard during the summer amid a wave of bearishness toward Chinese companies, despite having consistently strong earnings.

Overall option volume is about 5 times greater than average in FMCN so far today, with calls accounting for a bullish 71 percent of the total, according to the Heat Seeker.



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

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


This article appears in: Investing , Options

Referenced Stocks: FMCN

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  • $10.9199 ▲ 12.46%
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38,496,266
    $116.31 unch
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As of 11/21/2014, 02:20 PM

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