As Sina goes parabolic, some investors are taking the other side
of the trade.
optionMONSTER's tracking systems detected a flurry of call selling
in the Chinese Internet stock, which has more than doubled in the
last six months.
Most of the activity focused on the December contracts. Investors
wrote calls at the 75 strike for about $1.05 early in the session,
then as much as $2.50 in the afternoon. The December 80s were sold
for $0.25 to $0.56. Volume totaled 2,574 and 1,356 respectively.
There was similar activity in the December 72.50s calls, according
to optionMONSTER data.
When investors write calls, they agree to sell a stock at the
agreed strike price. Shareholders often use the strategy to lock in
an exit price, so heavy call selling usually reflects a belief that
a stock is near its top.
SINA rallied another 5.76 percent yesterday, ending the session at
a new all-time closing high of $75.62. It's been surging as
investors price in the growing popularity of its Weibo blogging
service. There was also substantial short interest earlier in the
year, which apparently helped drive the gains. Pete started
pounding the table on the name back in September.
The call selling pushed total option volume in SINA to 10 times
greater than average in the session.
(Chart courtesy of tradeMONSTER)