China-based Internet issues are having quite a day, and NQ Mobile Inc (ADR) (NYSE:NQ) is no exception. The stock is up 7.5% at $4.00, and call players are flocking to NQ's options pits. In fact, calls are trading at 12 times what's typically seen at this point in the day, and are outpacing puts by a 16-to-1 margin. Meanwhile, short-term contracts are in high demand, per the security's 30-day at-the-money implied volatility, which has surged 35.8% to 103.7%.
Drilling down, NQ's April and May 4.50 calls have seen the most action, while the stock's April and weekly 5/8 4-strike calls have also garnered notable attention. There appears to be buy-to-open activity occurring across the board, as speculators gamble on NQ toppling the strike prices by the respective expiration dates.
This attention from call buyers is nothing new. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, NQ's 10-day call/put volume ratio of 43.36 ranks in the 97th annual percentile. With one-fifth of the security's float sold short, though, some of this recent call buying -- specifically, at out-of-the-money strikes -- could be a result of shorts hedging their bearish bets.
Technically speaking, NQ Mobile Inc (NYSE:NQ) has been a long-term laggard, shedding more than three-quarters of its value over the past 52 weeks. Additionally, today's rally is being contained by the $4 level -- an area that has served as a ceiling for the shares since late February.