NQ Mobile Inc. (NQ) Traders Foresee Short-Term Upside

NQ Mobile Inc (ADR) (NQ) calls are trading at a breakneck pace today

by Alex Eppstein

Published on May 26, 2015 at 2:52 PM
Updated on Jun 24, 2020 at 10:16 AM

NQ Mobile Inc (ADR) (NYSE:NQ) is bucking the broad-market trend lower, surging 3.6% to flirt with $3.78. As such, calls are being exchanged at four times the rate expected at this point in the session. By the numbers, nearly 6,500 calls are on the tape, versus roughly 1,000 puts.

Buy-to-open activity is detected at the in-the-money July 3.50 call, which is NQ's most active option. By purchasing these positions at a volume-weighted average price (VWAP) of $0.58, the traders are expressing confidence the stock will take out breakeven at $4.08 (strike plus VWAP) by the close on Friday, July 17 -- when back-month options expire.

Not everyone's so optimistic toward NQ. A lofty 17.5% of the security's float is sold short, representing more than two weeks' worth of pent-up buying power, at average daily volumes.

Technically speaking, NQ Mobile Inc (NYSE:NQ) has spent most of 2015 churning in the $3.50-$4.50 range. Meanwhile, the 10- and 20-day moving averages are on the verge of a bullish cross, hinting at potential short-term support.

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