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March-dated Qihoo 360 Technology Co Ltd options are in high demand
Since hitting an annual low of $56 earlier, Qihoo 360 Technology Co Ltd (NYSE:QIHU) has rebounded strongly -- up 2.8% at last check to trade at $60.53. In options land, traders are rolling the dice on additional gains, too. In fact, calls are crossing at twice the typical intraday pace, and nearly triple the number of puts on the tape.
Garnering notable attention is QIHU's March 77.50 call, where approximately 1,400 contracts have changed hands. Almost three-quarters have traded at the ask price, and volume outstrips open interest, making it safe to assume bullish positions are being freshly minted -- a theory supported by Trade-Alert.
By buying to open the deep out-of-the-money calls, these traders are hoping QIHU will topple $77.50 by March 2015 options expiration. The stock hasn't approached these levels since late September, though. As such, delta on the call is a slim negative 0.18, or 18%.
One potential upside catalyst for Qihoo 360 Technology Co Ltd (NYSE:QIHU) is its fourth-quarter earnings report, due out the first week of March -- ahead of expiration. Historically, the shares have averaged a single-session post-earnings move of 6.8% over the last eight quarterly reports -- though these were just as likely to be negative as positive.