Option Traders Pounce On These 3 Chinese Tech Stocks

Baidu Inc (ADR) (BIDU), Qihoo 360 Technology Co Ltd (QIHU), and SINA Corp (SINA) are headed higher

Digital Content Group
Apr 8, 2015 at 2:11 PM
facebook twitter linkedin

A number of Chinese tech stocks are booming this afternoon, including Baidu Inc (ADR) (NASDAQ:BIDU), Qihoo 360 Technology Co Ltd (NYSE:QIHU), and SINA Corp (NASDAQ:SINA). As such, option traders are pouncing, with both calls and puts flying off the shelves.

At last check, BIDU was 4.6% higher at $213.22, but remains 6.5% lower on a year-to-date basis. The intraday gains have calls running at double the expected intraday rate, with buy-to-open activity detected at the weekly 4/10 210 and 212.50 strikes, where north of 5,600 contracts have changed hands.

Likewise, QIHU is getting a lift from M&A activity in the cybersecurity sector, up nearly 11% at $59.87 -- and back in positive year-to-date territory. However, puts are trading at triple the usual rate for this point in the day, and traders are buying to open the weekly 4/10 59.50 strike, in the hopes of a retreat for the underlying through Friday's close, when the series expires.

Daily Chart of QIHU since January 2015

Another Chinese tech name that's made a notable move is SINA, soaring 11.5% to trade at $36.90 -- though the stock remains 1.3% lower in 2015. Intraday call volume is at a brow-raising 12 times the norm, and speculators are expressing confidence that the shares will topple the round-number $40 level within the next two months, buying to open the May 40 call.

Taking a step back, call buying has been the norm for both Qihoo 360 Technology Co Ltd (NYSE:QIHU) and SINA Corp (NASDAQ:SINA), according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stocks' respective 10-day call/put volume ratios of 4.93 and 5.96 rank in the 96th and 95th annual percentiles.

On the other hand, Baidu Inc (NASDAQ:BIDU) has seen puts bought to open over calls at a faster-than-usual clip of late. The equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.77 outstrips 94% of comparable readings from the past year.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners