Chinese Internet Stock Surging on Impressive Earnings

JD.com also renewed its agreement with Tencent

Emma Duncan

Managing Editor

May 10, 2019 at 10:22 AM

Shares of JD.com Inc (NASDAQ:JD) are up 5.6% at $29.04 in early trading, after the Chinese internet firm reported a first-quarter earnings beat, and said it renewed its cooperation agreement with Tencent Holdings for another three years. JD stock gapped lower on Monday, amid renewed U.S.-China trade tensions, but ultimately found support from its 200-day moving average. The equity is now up nearly 39% year-to-date.

JD was a favorite of option bulls ahead of earnings. This is per the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which comes in at 5.06 -- in the 78th percentile of its annual range. In other words, roughly five calls were bought to open for every put on JD.com stock during the past two weeks.

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.53 indicates that call open interest easily surpasses put open interest among options expiring within the next three months. This SOIR is also in the 19th percentile of its annual range, suggesting short-term options traders have rarely been more call-biased in the past year.

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