Markets

Bulls want to play NetEase.com

NetEase.com has been grinding in a range, and one investor is placing a cheap upside bet.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 2,000 September 52.50 calls for $0.70 to $0.80 and the sale of roughly the same number of September 45 puts for $0.35 to $0.55. Volume was more than quadruple open interest in both strikes.

The position cost of about $0.40 to open, and will profit from a quick rally in the Chinese gaming stock. It will make money if NTES pushes above $52.50 and stands to lose money below $45. If shares remain between those levels, the position will expire worthless.

NTES rose 1.86 percent to $49.95 in morning trading and has spent most of the year between $40 and $50. Its last earnings report on Aug. 17 crushed estimates, and the stock has held up better than most as investors continue to favor Chinese Internet names.

Overall options volume in the name is 5 times greater than average so far today.

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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