NQ Mobile Inc. (NQ) Trader Takes Aim at an Elusive Mark

NQ Mobile Inc (ADR) (NYSE:NQ) has not traded north of $4.50 since early January

by Karee Venema

Published on Apr 21, 2015 at 11:34 AM

NQ Mobile Inc (ADR) (NYSE:NQ) has spent almost the past two weeks trading north of the $4 mark, suggesting this former layer of resistance may now be switching to a more supportive role. In today's trading, one optimistic options trader is betting on a bigger breakout over the next two weeks, and is taking aim at the $4.50 mark.

Specifically, 84% of NQ's total intraday volume occurred when a block of 1,999 weekly 5/8 4.50-strike calls changed hands earlier. It appears this lot of out-of-the-money calls was bought to open, with the goal being for the equity to rally north of $4.50 by next Friday's close, when the weekly series expires. Considering NQ hasn't seen the north side of $4.50 since early January, delta on the call is docked at 0.34, suggesting a roughly 1-in-3 chance of an in-the-money finish.

From a wider sentiment perspective, today's call-skewed session just echoes the withstanding trend. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NQ's 20-day call/put volume ratio is docked at 12.12. Echoing this is the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.47, which ranks lower than 64% of all similar readings taken in the past year. In other words, short-term speculators are more call-heavy than usual. With 18.3% of the equity's float sold short, though, some of this could be a result of shorts hedging their bearish bets.

As noted, NQ was able to break above previous resistance earlier this month. In today's trading, the stock is flat at $4.14, following news of a management shake-up. Specifically, co-CEO Omar Khan will resign from his post on May 1. Going forward, NQ Mobile Inc (NYSE:NQ) will no longer use the co-CEO system.


A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report 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


Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....
Tiffany Stock Drops as Takeover Talks Dissipate
LVMH was to acquire Tiffany & Co in a billion-dollar deal
Coty Stock Glows Up with Possible Kardashian Cosmetics Line
The trendy cosmetics company is in talks with reality TV star Kim Kardashian West over a line of beauty products
The Next Big Player in U.S. MJ Boom
Most pure-play marijuana stocks in the U.S. trade on the Over-the-Counter stock exchange.