Chinese Crackdown Brings Out Sina Corporation (SINA) Bears

The Chinese government plans to punish SINA Corp (SINA) for censorship violations

by

Published on Apr 13, 2015 at 12:03 PM
Updated on Apr 20, 2015 at 5:32 PM

SINA Corp (NASDAQ:SINA) is getting thrashed today, down 6.6% at $35.02, after Chinese regulators vowed to crack down on the Internet company for self-censorship issues. Amid the swoon, traders are focused on the stock's puts, which are being exchanged at more than twice the usual intraday rate. Also, the equity's 30-day at-the-money implied volatility has popped 8% to 38.3%, suggesting speculators are on edge about SINA's future price action.

Digging deeper into today's activity, it appears traders are buying to open the April 35.50 and 35 puts, which are SINA's two most popular options so far. The in-the-money put buyers think the shares will extend their deficit south of $35.50 by front-month expiration at Friday's close, while the at-the-money speculators expect the stock will breach $35 through the option's short lifetime.

Put buying on SINA has been accelerated relative to call buying in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.70 outranks nearly three-quarters of all readings from the past year.

Meanwhile, on the charts, SINA Corp's (NASDAQ:SINA) nosedive has the shares sitting back below their year-to-date-breakeven, after sector-wide tailwinds lifted them above the crucial level last week. Longer term, the stock has struggled significantly, shedding one-third of its value year-over-year.

Daily Chart of SINA since December 2014


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.
Tesla Drops Prices to Boost Demand
Tesla is cutting North American and Chinese prices by as much as 6%
DPZ Sizzles After Same-Quarter Sales Bounce
Comparable-store sales in the U.S. rose by 14% during the first two months of the current quarter
With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.