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

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Published on Apr 8, 2015 at 2:11 PM
Updated on Jun 24, 2020 at 10:16 AM

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.


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