Markets

Bull bets on extreme moves in Vishop

The bulls are not done with Vishop, which has been explosive since going public last year.

The Chinese online retailer priced its IPO at $5.60 in March 2012 and earnings have beaten estimates for at least four straight quarters. It's now over $40, up another 1.45 percent to $42.80 in morning trading, and the option paper continues to look for more upside.

optionMONSTER's Heat Seeker tracking program detected the purchase of 3,100 September 45 calls against previous open interest of 2,222 contracts. The initial blocks priced for $4.20 and $4.30, followed by a single large print for $5. That reflects a strong buying pattern.

These long calls lock in the price where shares can be purchased, letting investors position for upside at a fraction of the cost. A rally of 30 percent in the stock would double their money. (See our Education section)

While the move in VIPS has been extreme, other Chinese Internet stocks have been rallying as well. Our researchLAB market scanner shows the group as the third-strongest of more than 100 industry subsets in the broader market over the last week. We've also rung up winning trades recently in Sina and Youku Tudou.

Total option volume in VIPS is 6 times greater than average so far today. Calls outnumber puts by a bullish 37-to-1 ratio.

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.


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

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