3 China-Based Stocks Rewarding Option Bulls

Weibo Corp (ADR) (NASDAQ:WB), SINA Corp (NASDAQ:SINA), and Qihoo 360 Technology Co Ltd (NYSE:QIHU) are flying high

Oct 16, 2015 at 12:43 PM
facebook twitter linkedin


Chinese markets soared overnight, and a number of U.S.-listed stocks are also shooting higher today, amid the latest round of M&A rumblings. In particular, Weibo Corp (ADR) (NASDAQ:WB), SINA Corp (NASDAQ:SINA), and Qihoo 360 Technology Co Ltd (NYSE:QIHU) are each flying up the charts today -- likely to the delight of options traders.

WB was last seen 13.3% higher at $15.55, and has now powered back into positive year-to-date territory for the first time since early August. From a slightly longer-term basis, October has been a boon to the shares, which have jumped 33% month-to-date. Amid these gains, short-term speculators have grown call-skewed toward Weibo Corp. Specifically, the stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.41 -- in the bottom quartile of its annual range.

SINA has popped 8.3% to trade at $47.23 -- more of the same for a stock that's advanced over 26% in 2015. In fact, since touching their most recent low of $32.61 in late August, the shares have exploded 45% to the upside. Not surprisingly, option traders have been buying to open SINA Corp calls over puts at an extreme pace in recent weeks. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 8.67 registers at the top of its annual range.

Finally, QIHU has tacked on 3.2% to trade at $55.33, as it continues to cruise atop its rising 10-day moving average. Nonetheless, the shares are still sitting on a 3.4% year-to-date deficit, and are approaching a potential layer of resistance at their descending 80-day trendline. These longer-term struggles haven't shaken the confidence of option bulls. In fact, Qihoo 360 Technology Co Ltd sports a 10-day ISE/CBOE/PHLX call/put volume ratio of 10.10 -- with more than 10 calls bought to open for each put. More significantly, this ratio ranks just 4 percentage points from an annual acme.
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners