NQ Mobile Inc. (NQ) Call Buyers Bank On a Breakout

Call buyers foresee additional gains ahead for NQ Mobile Inc (ADR) (NQ)

May 27, 2015 at 2:47 PM
facebook twitter linkedin

NQ Mobile Inc (ADR) (NYSE:NQ) is up 7.3% at $4.13, rallying along with the broader tech sector. About 23,000 calls are on the tape -- 13 times the average afternoon amount, and triple the number of puts exchanged -- with the June series garnering attention.

Specifically, NQ's June 4 and 4.50 calls are being bought to open, as speculators are confident the stock will extend its run higher through the close on Friday, June 19, when front-month options expire. The volume-weighted average price (VWAP) on the lower-strike call is $0.35 -- yielding a breakeven mark of $4.35 (strike plus VWAP) -- while the VWAP on the higher-strike call is $0.19, resulting in a breakeven of $4.69.

This call-buying trend has been prominent over the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, NQ's 50-day call/put volume ratio across those exchanges is 6.17 -- higher than four-fifths of comparable readings from the previous year.

This optimism is fairly surprising, considering NQ Mobile Inc (NYSE:NQ) has been range-bound in recent months. Since mid-January, the stock has churned between $3.50 and $4.50.

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