JD Dips as Cybersecurity Crackdown Weighs

The security has already shaved 17% year-to-date

Assistant Editor
Jul 6, 2021 at 10:36 AM
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Several China-based names are moving lower today, including e-commerce concern JD.com (NASDAQ:JD), after the Chinese government signaled a wave of cybersecurity reviews. To start, DiDi Global (DIDI) tanked earlier, after its app was blocked from being downloaded as regulators conduct these reviews. Now, more of these U.S.-traded stocks are under pressure, as a potential crackdown weighs. 

At last check, JD was down 4.1% to trade at $73.10. Since mid-April, the $80 level has rejected numerous at  east three rallies, while overhead pressure looms at the stock's 100-day moving average as well. On track for its third-straight loss, JD is down 17% year-to-date. 

Despite this lackluster price action, the options pits have been overwhelmingly bullish of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), JD sports a 10-day call/put volume ratio of 7.85, which stands higher than all other readings from the past year. 

A shift in sentiment seems to be happening today, however. So far, 25,000 puts have crossed the tape, which is triple the intraday average. Most popular is the July 70 put, followed by the 80 call in the same series.

Lastly, the stock's Schaeffer's Volatility Index (SVI) of 29% stands higher than all of the other readings in its annual range. This implies options players are pricing in extremely low volatility expectations at the moment. 

 

 

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