JD.com Stock Soars on $550 Million Google Investment

Options traders were optimistic towards JD ahead of the announcement

Managing Editor
Jun 18, 2018 at 10:15 AM
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Shares of JD.com Inc (NASDAQ:JD) are up 2.8% at $44.83 in early trading, after Google announced a $550 million investment in the Chinese internet firm. Per the agreement, Google will receive 27.1 million JD Class A shares, priced at $20.29 each, while JD will sell select products through Google's shopping platform. 

JD has been surging higher since the end of May, with  the stock bouncing sharply from its May 31 annual low of $34.76. The equity now sports a year-to-date gain of 8.2%, though it's still looking up at its Jan. 29 record high of $50.68.

In the options pits, traders have been optimistic towards JD, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing the stock with a 10-day call/put volume ratio of 6.92, ranking in the 90th percentile of its annual range. This lofty ratio means calls have been purchased over puts at a faster-than-usual clip during the past two weeks.

Lastly, now may be a good time to target near-term JD.com stock options. The Chinese internet concern's Schaeffer's Volatility Index (SVI) is just 32%, ranking in the 13th percentile of its annual range. This low ranking suggests there are lower-than-normal volatility expectations priced into short-term options at the moment. 

 

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