Options Traders Blast China-Based Stocks on Covid News

These 3 stocks have been on options traders' radars

Deputy Editor
Dec 5, 2022 at 10:42 AM
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Reports that Covid-19 restrictions could ease in Beijing and Shenzhen are boosting several Chinese internet stocks. Three names on our radar this morning are Pinduoduo Inc (NASDAQ:PDD), Bilibili Inc (NASDAQ:BILI), and Alibaba Group Holding Ltd (NYSE:BABA).

Pinduoduo Stock Rally Continues

The last time we checked in on Pinduoduo stock, shares had just cleared annual highs. PDD was last seen 0.2% higher to trade at $86.47, and managed to hit a sixth-straight annual peak right out of the gate. Longer term, the equity sport an impressive 121.5% nine-month lead.

Bearish options traders don't seem convinced this rally will last. So far, 16,000 puts have crossed the tape, or double the intraday average volume. Nevertheless, the January 20, 2023 135-strike call is the most popular contract, followed by the 50 put in that monthly series.

BILI Looks for Best Open in Three Months

Meanwhile, Bilibili stock is down 0.9% at $19.67. The equity opened at its highest level since September, and soared above its 180-day moving average earlier, however. In the last 12 months, BILI has has shed 56.7%.  

Options traders are hopping on Bilibili stock. Already, overall options volume is running at five times what's typically seen at this point, with 23,000 calls and 16,000 puts traded so far. Most popular by far is the December 70-strike call, while new positions are being opened at the weekly 12/9 19-strike put.

Alibaba Stock Fresh Off Red-Hot Week

Last week, Alibaba stock added 19.3% for its best weekly performance since March. The shares are treading water $90.08, and are down 23.9% year-to-date, though. The security briefly broke above its 180-day trendline earlier, which capped Friday's rally above the $90 level.

Long calls have been more popular than usual in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 3.26 sits higher than all readings from last year.


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