Investors are circling mobile camera bigwig GoPro Inc (NASDAQ:GPRO) ahead of the company's turn in the earnings spotlight tomorrow night, and amid reports that GoPro cameras are the latest in vehicle dashboard accessories. The shares are up 5.2% at $59.61, volume is running high, and a close north of $60 would be a first since mid-January. Meanwhile, it should be noted that $60.85 translates into a 38.2% Fibonacci correction from GPRO's all-time high of $98.47.

What's more, option traders are rolling the dice on more upside for GPRO, with intraday call volume running at seven times the average clip, and outpacing put volume by a margin of 2-to-1.

The stock's 30-day at-the-money (ATM) implied volatility has popped 18.3% to 64.9%, reflecting the growing expectations for a big move after earnings. Specifically, GPRO's short-term ATM straddle indicates the options market is pricing in a 13.1% swing in either direction. Over the past four quarters, GPRO has averaged a move of 13.4% in the session after the company reported earnings. 

Taking a step back, during the past two weeks, GPRO has seen roughly 151,000 calls change hands, compared to 85,000 puts. More than half of those calls were out of the money (OOTM), according to Trade-Alert, and more than one-third traded on the ask side, hinting at buyer-driven action.

The weekly 7/24 60-strike call -- which was OOTM last week, when GPRO was trading near $56 -- saw the biggest open interest increase during the past 10 sessions, with roughly 2,400 contracts added. Meanwhile, the newly front-month August 60 call saw more than 1,900 contracts initiated. By purchasing the calls to open, the buyers expect GPRO to surmount $60 within the options' lifetime. Buyers of the weekly calls are counting on that move to come to fruition before this Friday's close, while buyers of the monthly calls have until Friday, Aug. 21, for the jump to play out.

In light of GPRO's surge this morning, delta on the weekly 7/24 60-strike call has jumped to 0.49 from 0.34 at Friday's close, demonstrating the growing odds of an in-the-money finish. The call is currently trading at a volume-weighted average price (VWAP) of $3.15, meaning buyers today will profit if GPRO topples $63.15 (strike plus VWAP) by the end of the week.

Likewise, delta on the August 60 call has jumped to 0.51 from 0.39. Due to its added time value, the going VWAP on the call is $3.84, making at-expiration breakeven $63.84. 

Finally, GoPro Inc's (NASDAQ:GPRO) Schaeffer's Volatility Scorecard (SVS) sits at a healthy 93. In simple terms, now is an opportune time to gamble with GPRO's options, as the stock has tended to make outsized moves on the charts over the past year, relative to what the options market has priced in.

A belated Happy VIX-piration to all! Unfortunately, it's not likely a happy day for the majority of CBOE Volatility Index (VIX) call players.

$VIX settlement is 14.67 -- 94% of June VIX call options expire worthless $VRO $SPX $SPY

— Todd Salamone (@toddsalamone) June 17, 2015

In "regular" options, that "percentage of options closing worthless" number can be misleading. It doesn't factor options that the owners already closed profitably; it only counts options left open at the end.

But in VIX, it's a good representation. That's because almost every call out there was out of the money when the order initiated and was never actually in the money. Yes, a trader could still make a profit buying and selling them, even if they're never close to the money. That didn't happen either, though; there was never that big volatility pop to give speculators an easy out. And remember: Time weighs on all options, so even if a trader did catch a small VIX pop, the actual VIX call was probably lower. They're all priced for a quick VIX pop to begin with, so the small pops won't help them much. 

And all sets aside the fact that most VIX calls are bought as either insurance (often for credit markets and not stocks) or cheap spec and are not bought just to flip. Most buyers likely lost on VIX futures, as well. Tough to ever know that for sure, but it's a reasonable assumption, given the term structure almost always looks as it does now:

All of which begs the question, why? Why do traders/investors always "overpay" for VIX futures and VIX calls? 

I understand that they serve a function as insurance. And insurance companies (in this case, hedgies and traders willing to sell protection) only write policies (sell VIX calls and futures) if they can generate enough premium to offset the occasional claim (VIX pop). So the structure suggests sellers will generally get the best of the price. 

But why does the term structure stay this upwardly sloped? Sure, we're a little flatter than the last couple times VIX sat about here:

But it's not a lot flatter and it's on top of 5-6 years of almost non-stop VIX speculation pain. And it hasn't stopped VIX call speculation, which we know is at a high. 

When investing behavior does poorly, it tends to change behavior. Prices adjust. That is everywhere except the VIX Complex. It's always Groundhog Day here. 

Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.

 

In the wake of yesterday's Fed policy statement, futures are pointed higher ahead of the bell. In company news, today's stocks to watch include e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA), wearable tech firm Fitbit Inc (NYSE:FIT), and electronic design specialist Jabil Circuit, Inc. (NYSE:JBL). 

• BABA has entered into a joint venture with Taiwan's Foxconn Technology and Japan's SoftBank Corp to sell the latter's household robot, named Pepper. Specifically, Alibaba Group Holding Ltd and Foxconn are each paying $118 million to secure 20% stakes in SoftBank Robotics Holdings. Shifting gears, it's been a rough 2015 for BABA, down 16.5% year-to-date to rest at $86.80, and currently facing pressure from its descending 10-day moving average. Nevertheless, analysts remain extremely bullish, doling out 21 "strong buy" ratings, two "buys," and not a single "hold" or worse recommendation. In other words, BABA could be vulnerable to future downgrades.


• FIT will make its highly anticipated Big Board debut today, and priced its initial public offering at $20 per share -- above the anticipated $17-$19 range. At these levels, Fitbit Inc is valued at over $4 billion. Last year, the company earned nearly $132 million on roughly $745 million in sales.


• Finally, JBL is bracing for a 7.5% drop out of the gate, amid the firm's mixed fiscal third-quarter results and lower-than-expected revenue forecast. The expected gap lower threatens to wipe out most of the stock's year-to-date gains, and send it south of its supportive 80-day moving average. This may be good news for recent put buyers. During the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Jabil Circuit, Inc. has racked up a put/call volume ratio of 1.85 -- in the 89th percentile of its annual range. JBL closed Wednesday at $24.33.

Analysts are weighing in today on tech titan Oracle Corporation (NYSE:ORCL), airline stock Spirit Airlines Incorporated (NASDAQ:SAVE), and semiconductor concern Micron Technology, Inc. (NASDAQ:MU). Here's a quick roundup of today's bearish brokerage notes on ORCL, SAVE, and MU.

• ORCL is getting smacked ahead of the open, pointed 5.7% lower, after the company reported fiscal fourth-quarter earnings that missed the Street's expectations. Analysts have displayed their displeasure, with no fewer than six brokerage firms reducing their price targets on the shares. Wedbush set the lowest mark at $40, and reaffirmed its "neutral" opinion. After churning between $42 and $45 for most of 2015, Oracle Corporation closed yesterday at $44.91 -- just below its year-to-date breakeven mark. There's a good chance option traders are disappointed this morning. ORCL's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.21 is higher than 81% of readings from the past 12 months.


• Credit Suisse and Barclays both weighed in on several airline stocks overnight. For SAVE, the former cut its outlook to "neutral," while lowering its price target to $69 from $75, and the latter reduced its price target by $7 to $98. The shares are now 1.5% lower in electronic trading. Taking a step back, the stock's been getting hammered since touching its all-time best of $85.35 on Dec. 8, giving back close to 27% to settle yesterday at $62.42. It appears speculators are well-positioned for the pullback, though, as put buying has been popular recently. Spirit Airlines Incorporated's 10-day ISE/CBOE/PHLX put/call volume ratio stands at 1.04 -- higher than 81% of readings from the past year.


• MU has dropped more than 30% in 2015, and it doesn't look like things will get better any time soon. Since yesterday's close, Raymond James, Stifel, and Susquehanna have all lowered their price targets, with the latter setting its mark at $36 -- the lowest among the bunch. Micron Technology, Inc. finished Wednesday at $24.48, representing an almost 34% discount to its average 12-month price target of $36.93. Considering this, plus the fact that 79% of analysts still rate the stock a "buy," MU may see additional bearish notes in the near future. Elsewhere, the company will release earnings a week from tonight. 

Analysts are weighing in on drugmaker BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), surveillance specialist Digital Ally, Inc. (NASDAQ:DGLY), and semiconductor concern Marvell Technology Group Ltd. (NASDAQ:MRVL). Here's a quick roundup of today's bullish brokerage notes on BRMN, DGLY, and MRVL.

• BMRN is up 7.2% in electronic trading, after receiving a number of upbeat analyst notes following reports the company's experimental dwarfism drug, BMN 111, showed promise in a mid-stage study. William Blair, for example, raised its price target to $140 from $126, saying it expects the treatment to be a breakout product for BioMarin Pharmaceutical Inc. SunTrust Robinson, meanwhile, boosted its target price by $19 to $170, explaining it projects global sales of roughly $700 million. On the charts, the stock has had a standout year -- up nearly 37% to trade at $123.60, hitting a late-March record high of $133.54 along the way. Option traders have been rolling the dice on more upside, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 12.94 calls for every put over the past 10 days.


• H.C. Wainwright initiated coverage on DGLY with a "buy" rating and a $24 price target, representing expected upside of 77% to last night's close at $13.56 -- and a trek into territory not seen since last September. As a result, the stock is up 8.7% ahead of the bell. Today's projected price move would be welcome for a security that's down almost 28% from its mid-May year-to-date high of $18.80. Plus, the shares are poised to topple the $14 mark -- an area that has contained DGLY for most of the past month. On the sentiment front, traders have taken the skeptical route. Specifically, a healthy 19.4% of Digital Ally, Inc.'s float is sold short.


• Goldman Sachs raised its outlook on MRVL to "neutral" from "sell," removed the stock from its "America's Sell" list, and upped its price target to $14 -- sending the shares 1.4% higher in electronic trading. Technically speaking, MRVL has been on the mend since hitting a 2015 low of $13.05 on May 22, up 8% to trade at $14.10. Against this backdrop, analysts have been changing their skeptical tune, and currently 11 out of 25 maintain a "buy" or better rating on Marvell Technology Group Ltd. This growing optimism has been seen in the options pits, as well, where MRVL's 10-day ISE/CBOE/PHLX call/put volume ratio has jumped to 60.54 from 8.32 over the past two weeks. What's more, the current ratio ranks in the 92nd annual percentile, meaning long calls have been initiated over long puts at a near-annual-high clip.

I remember it like it was yesterday. I lived in New York, and one of my best friends worked for Goldman Sachs Group Inc (NYSE:GS) -- and he was almost always working. At least twice, I visited his office around midnight, and couldn't believe how many employees and interns were still hacking away at their computers.

Well, apparently, Goldman's gone soft. The news today: The investment bank is banning interns between the hours of 12 a.m. and 7 a.m.

In one sense, the development makes little sense. I mean, who is more capable of pulling an all-nighter than a motivated 20-something? But the 2013 death of a Bank of America Corp (NYSE:BAC) intern -- partially brought on by exhaustion -- reminds us that there are only so many all-nighters a body can take.

Meanwhile, GS has been muscling higher on the charts, up over 10% this year at $213.90, atop support from its 10-day moving average. What's more, the stock is approaching its post-recession peak of $214.60, touched last week.

Nevertheless, skepticism is plentiful on the Street. Eleven of 14 analysts consider GS a "hold" or worse, and its consensus 12-month price target of $212 is below current trading levels. This could pave the way for future upgrades and/or price-target hikes.

Options traders are similarly bearish toward GS. The stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.95 is just one percentage point from an annual high. In other words, speculators have rarely bought to open puts over calls at such a rapid pace.

Echoing this, Goldman Sachs Group Inc's (NYSE:GS) Schaeffer's put/call open interest ratio (SOIR) of 1.31 ranks in the 81st percentile of its 52-week range -- meaning short-term put open interest outweighs call open interest by a bigger-than-usual margin. A capitulation among these skeptics could add fuel to GS' fire.

A number of equities are making big post-earnings moves today, including drugstore chain Rite Aid Corporation (NYSE:RAD), grocery giant Kroger Co (NYSE:KR), and home furnishings peddler Pier 1 Imports Inc (NYSE:PIR). Here's a quick check on RAD, KR, and PIR in the wake of their quarterly earnings reports.

• Due to its upcoming acquisition of EnvisionRx, RAD downwardly revised its full-year profit forecast. Additionally, Rite Aid Corporation fell just shy of analysts' bottom-line estimate for the first quarter, while revenue arrived in line. Against this backdrop, the shares are down 3% at $8.65 -- after earlier finding support near the $8.35 mark, home to RAD's 40-day moving average. Longer term, the stock has put in a strong technical performance, up 96% from its mid-October annual low of $4.42. While analysts have been climbing on board RAD's bullish bandwagon, short sellers have been taking a decidedly different route. Specifically, short interest climbed 12.1% in the most recent reporting period, and now accounts for 32.2 million shares. Should RAD resume its uptrend, a capitulation from some of the weaker bearish hands could help propel the equity higher.


• KR is popping today, after the company reported first-quarter results that exceeded estimates, and raised its same-store sales outlook for 2015. The shares initially jumped 2.9% on the news -- less than the options market was expecting -- and were last seen up 1.3% at $73.86. This positive price action is just more of the same for a stock that's up almost 50% year-over-year. Short-term options traders have been bracing for a post-earnings pullback, though, per Kroger Co's Schaeffer's put/call open interest ratio (SOIR) of 0.86, which rests in the 82nd annual percentile. The stock could find a fresh burst of buying power, should some of these put players surrender to its technical prowess.


• PIR said its first-quarter profit tumbled more than 50%, while sales edged up 3.1%. As a result, the company announced a round of cost-cutting measures, including the closing of a number of stores. Even with the news, share of PIR are up 0.9% at $12.12 -- bringing their year-to-date deficit to 21.3%. Amid this longer-term decline, the brokerage bunch has been downwardly revising its outlooks on the shares, with Cantor Fitzgerald cutting its price target on the security to $16 from $17 overnight. However, there's still room for more bearish brokerage notes, considering 31% of analysts maintain a "strong buy" rating on Pier 1 Imports Inc. Plus, the average 12-month price target of $14.83 sits roughly 22.4% above the equity's current perch, while Cantor Fitzgerald's new target price still represents a 32% premium.

U.S. equities are off to a hot start, with the Dow surging higher in mid-morning trading. Three stocks in particular seeing notable gains are shoemakers Nike Inc (NYSE:NKE), Skechers USA Inc (NYSE:SKX), and Deckers Outdoor Corp (NYSE:DECK). Below, we'll take a close look at what has NKE, SKX, and DECK moving higher.

• NKE has jumped 1.5% to trade at an all-time high of $106.36. On a long-term basis, the security has put in a solid performance, with a year-over-year lead of over 40%. The shares have been riding atop their rising 10-week moving average since late February. Meanwhile, in the options pits, Nike Inc's Schaeffer's put/call open interest ratio (SOIR) stands at 0.78, revealing that call open interest outweighs put open interest in the stock's front three-months' series. Plus, this ratio is lower than 71% of readings from the past year, indicating these speculative traders are more call-skewed than usual. This trend is continuing today, as NKE calls are crossing at five times the expected intraday pace. Looking ahead, the company will release fiscal fourth-quarter earnings a week from today.


• SKX, too, touched a record peak earlier ($112.49), and was last seen at $112. The stock has been simply unstoppable in 2015, more than doubling in value. In the meantime, short sellers have been fleeing in bunches, as short interest plummeted almost 50% during the two most recent reporting periods. Now, however, the pessimism appears to have sprung to Skechers USA Inc's option pits. For one, the stock's SOIR sits at an annual extreme of 0.93. Plus, put buying has been much more popular than normal, according to SKX's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.91 -- higher than 87% of readings from the past year. However, given the stock's technical track record, some of this put activity may be at the hands of shareholders protecting paper profits.


• Although DECK is 1.9% higher today at $75.73, it's the odd man out in this group, as it's far from its all-time high of $118.90 from October 2011. Plus, the shares haven't done well on the charts, coming into today 18% below their year-to-date breakeven mark. This may be part of the reason for the bearish analyst attention, as nine of 15 brokerage firms say Deckers Outdoor Corp is just a "hold." Option traders seem to be optimistic, however, according to the stock's 50-day ISE/CBOE/PHLX call/put volume ratio. This reading of 2.15 is only 1 percentage point from an annual high. Still, demand for DECK's short-term options appears muted today. The equity's 30-day at-the-money implied volatility is only at 27% -- lower than 91% of readings from the past 12 months. 

While call options are usually associated with bullish bets, and put options are associated with bearish positions, credit spreads essentially flip everything you thought you knew about options. With credit spreads, traders can use calls to bet on a ceiling for a stock, and utilize puts to play support.   

Specifically, short call spreads are entered by simultaneously selling to open a call and buying to open a less expensive call, and vice versa for puts. The two-option trade is entered for a net credit, which the trader can pocket if the options expire out of the money (representing the maximum potential reward). Risk, meanwhile, is capped at the difference between the two strikes, minus the net credit. 

Interested to learn more? I sat down with Schaeffer's Senior Equity Analyst Joe Bell, CMT, to get a trader's take on credit spreads and more (like the best Cincinnati chili). 

• What are the advantages/disadvantages of credit spreads? Advantages: You can profit from moves and profit from lack of moves; time decay is on your side; you can profit despite a moderate move against your view; risk is defined when you enter the trade; there's a high win rate; and you can profit in all types of market environments. Disadvantages: Losses can often be a multiple of your potential reward, and credit spreads require much more patience than directional premium buying. One must have a high batting average if maximum gain is low relative to maximum loss. 

• What prompts you to initiate a credit spread vs. a long call or put recommendation? Any specific indicators? Credit spreads we trade are traditionally out of the money and thus provide cushion in case you are slightly wrong on the direction. As long as the options stay out of the money, you earn the maximum profit. It is generally a more conservative strategy than a long call or put recommendation. In addition to the wealth of technical and sentiment indicators we focus on, you really want to be aware of implied volatility of options. The higher the premiums are, the more you collect when you sell a credit spread. 

• Is there an "ideal" market environment or stock backdrop for credit spreads? You can utilize these strategies in all types of environments, but generally you will collect more premium when implied volatility is higher. This basically means options are expensive relative to the past. Credit spreads are also good strategies to use when you expect a stock or sector to take a "breather" and don't expect a big directional move in the future. 

• What are the "ideal" contracts for these spreads? Short-term? Long-term? Weekly? Monthly? LEAPS? That all depends on your outlook and how different options are priced. You can trade credit spreads using any time frame you want. We generally focus options with a shelf life between 4-7 weeks, but occasionally this can be much shorter or longer. 

• As far as trade management, what do you do differently, if anything, for a credit spread vs. a traditional call or put purchase? A credit spread is a completely different trade and type of mindset. Selling premium can often require more patience than buying premium. The one thing that is similar is my outlook. If my outlook changes for the underlying, then I need to address that with the management of my position. You have to also take into account how much time premium is left in the option for the credit spread. If the credit spread sold strike is penetrated and time decay is no longer in your favor, the credit spread has essentially become an aggressive directional bet and you need a big move in your direction right away. That is when trade management becomes very important and can have a major effect on your trading results. 

• Anything else? One thing I always tell people who are new to options is that options are really just tools. For example, trying to use a saw to insert a screw into a piece of wood probably won't be too successful. That doesn't mean the saw is a bad tool, though; it was just used for the wrong job. With respect to options, there are no such things as bad or good strategies. A trader's long-term success will come by applying the right option strategies to their outlook and ultimately being right about their outlook. In addition, no matter what strategy you are choosing, the dynamics of risk and reward always apply. More risk means more reward. Less risk means less reward. Anybody that tells you otherwise is probably someone you should question a little more.

For Fun 

• As a fellow Cincinnatian, how do you define yourself? In other words, Skyline Chili or Gold Star? Skyline, but try to stay away from both. (Editor's note: That is the correct answer.)  

• Blue & black or white & gold? White and gold! (Editor's note: That is the NOT the correct answer.)

• If you could give one piece of advice to Young Joe Bell before his first-ever trade, what would it be? Learn how to accept losses, close things quickly when they aren't working and move on as soon as possible. Be disciplined about this process, too. It's not always about being right or wrong, but making sure you limit the losses when you are wrong and be prudent with management of profits. An undisciplined smart person usually loses more money trading than a disciplined dumb person.

The weekly American Association of Individual Investors (AAII) sentiment survey is showing some extreme pessimism, which -- especially for contrarians like us -- is welcome news. Of all the sentiment surveys we track, the AAII poll is probably the best gauge of the retail investor specifically. That's what makes its pessimistic tilt so promising: Retail traders are exceptionally poor at timing the market. 

How much pessimism is it showing? Looking at a four-week average of the percentage of AAII bulls, it's the lowest reading since March 2009. That's the exact bottom for stocks after the financial crisis. Below is a chart showing the four-week average for AAII bulls, along with the S&P 500 Index (SPX). The yellow dots mark times when the average for bulls falls below 25%. As you can see, three of the last four signals have been outstanding buying opportunities. After the other signal, in 2008, the market was higher by about 5% three months later -- but, of course, holding stocks for any length of time after that would have been awful.

Quantified Results: I quantified the results on how the SPX performed previously when the four-week moving average dipped below 25%. Looking at the results going back to 1990, you can see why this would excite the bulls. On previous occurrences, stocks on average have immediately taken off and rallied over the next six months. Looking specifically at the three-month returns, the SPX has averaged a gain of 10.9% after these signals, with none being negative. Six months after a signal, the index is up 13.7% on average, with 91% of the returns positive. The returns after a signal have outperformed typical market returns across all the time frames.

Finally, here are the individual occurrences since 1990. Needless to say, very impressive returns. 

While the major market indexes have lost their mojo ahead of this afternoon's highly anticipated Fed statement, the shares of Tesla Motors Inc (NASDAQ:TSLA) are trading north of $260 for the first time since October. Specifically, TSLA was last seen 2.8% higher at $260.17, thanks to an endorsement from Baron Capital founder Ron Baron. What's more, Tesla option traders are rolling the dice on more short-term upside for the stock. 

TSLA's 30-day at-the-money implied volatility has jumped 3.3% to 33.1%, and overall options volume is running at twice the average intraday clip. However, calls are the options of choice, outpacing puts by a margin of nearly 2-to-1. 

June-dated calls account for the four most popular contracts, with buy-to-open action detected at the 255 and 260 strikes. By purchasing the calls to open, the buyers expect TSLA to extend its momentum north of the strikes through Friday's close, when front-month options expire.

TSLA has been on fire recently, outperforming the broader S&P 500 Index (SPX) by roughly 21 percentage points during the past two months. As alluded to earlier, the stock is enjoying a lift this afternoon, after Baron said TSLA could be valued at $120 billion in four to five years -- more than three times its current worth -- and expects annual revenue to skyrocket more than tenfold by 2020.

What's more, a short-squeeze could help Tesla Motors Inc (NASDAQ:TSLA) continue higher. More than a quarter of the stock's float is dedicated to short interest, representing close to eight sessions' worth of pent-up buying demand, at the electric automaker's average pace of trading.

Stocks in Asia rallied big today, and this -- along with a buyout bid for Qihoo 360 Technology Co Ltd (NYSE:QIHU) -- is translating into gains for a number of China-based equities listed on U.S. indexes. Among the major movers are online media firm SINA Corp (NASDAQ:SINA), real estate portal SouFun Holdings Ltd (NYSE:SFUN), and Internet TV titan Youku Tudou Inc (ADR) (NYSE:YOKU).

• SINA is up 4.7% at $60.55 after bouncing from its 10-day moving average, and earlier touched an annual high of $61.25. Traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ought to be pleased with the upward move, as they've bought to open more than three Sina Corp calls for every put during the past two weeks. The resultant call/put volume ratio of 3.42 outstrips three-quarters of comparable readings from the past year.


• SFUN has tacked on 6.2% to wink at $9.49, bringing its year-to-date lead north of 28%. The shares have been ushered higher recently by their 10-week moving average, but could encounter resistance at the overhead $10 level. Option traders have been wagering on extended gains at a feverish pace of late, per SouFun Holdings Ltd's 10-day ISE/CBOE/PHLX call/put volume ratio of 40.65. Not only does this ratio indicate more than 40 calls have been bought to open for every put, but it also ranks in the bullishly skewed 90th percentile of its annual range.


• YOKU has muscled 5.8% higher to flirt with $29.92, and has now advanced 68% in 2015. What's more, the shares are nearing their annual high of $31.50, touched on June 5. Nevertheless, skeptical traders have rarely been more active, based on Yukou Tudou Inc's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.88, which outstrips 90% of comparable readings from the last year. Along similar lines, YOKU's Schaeffer's put/call open interest ratio (SOIR) of 1.72 rests a mere 4 percentage points from a 12-month put-skewed peak.

Interestingly, these gains are occurring amid a climate of extreme fear, according to a recent BofA-Merrill Lynch fund manager survey. Specifically, 70% of global investors believe China's equity market  is in a "bubble," and 50% foresee the nation's economy weakening. Risks to the market include stricter margin financing rules from the China Securities Regulatory Commission, and insider selling.