58.com Inc. (WUBA) Rally Prompts Reversal Among Traders

58.com Inc (ADR) (WUBA) has been a technical beast this month

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Published on Mar 23, 2015 at 10:59 AM
Updated on Apr 20, 2015 at 5:32 PM

58.com Inc (ADR) (NYSE:WUBA) puts have been popular recently across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day put/call volume ratio across these exchanges is 2.77 -- or just 3 percentage points from a 12-month peak.

Today, however, options traders are blazing an entirely different course, with shares of the online marketplace up 5.7% to flirt with $49.71. Specifically, WUBA calls are crossing at 76 times the expected pace for this point in the session. By the numbers, more than 7,200 calls have been exchanged, compared to just 430 puts. Short-term traders are active, too, per the equity's 30-day at-the-money implied volatility -- up 14.5% to 44.7%.

The majority of the call volume is transpiring at the April 50 call, where nearly 7,000 contracts are on the tape -- most of which are being bought to open. In other words, speculators expect WUBA to topple the round-number half-century mark by the close on Friday, April 17, when front-month options expire.

On the charts, WUBA has been ripping higher in 2015, tacking on nearly 20% -- unlike rival Alibaba Group Holding Ltd (NYSE:BABA). Most of these gains have occurred this month, boosted by solid fourth-quarter earnings and news of a stake in interior decorating site To8to. Earlier, 58.com Inc (NYSE:WUBA) topped out at an intraday high of $50.15.


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