JD.Com Inc (JD) Sell-Off Sparks Rush Toward Calls

Call volume is nearing peak levels on JD.Com Inc (ADR) (NASDAQ:JD) today

Apr 26, 2016 at 3:00 PM
facebook X logo linkedin

JD.Com Inc (ADR) (NASDAQ:JD) is getting slapped today amid heavy volume, down 7.7% at $25.33. In fact, 41.4 million JD shares have changed hands today -- an annual high. What's more, with the stock on the short-sale restricted list, JD's options pits are buzzing, with volume running at six times what's typically seen at this point in the day.

At last check, 64,900 call options had changed hands on JD, compared to 21,222 put options -- in the 99th and 93rd annual percentiles, respectively. Most active is JD's January 2018 45-strike call, where it looks like new positions are being purchased.

Meanwhile, shorter-term traders are buying to open JD's May 26 call. In other words, call buyers are hoping for a rally above the strike price by front-month options expiration at the close on Friday, May 20 -- a time frame which includes the firm's first-quarter earnings report, due the morning of Monday, May 9.

More broadly speaking, call buying has been a popular strategy in JD's options pits in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 6.74 sits higher than 71% of all comparable readings taken in the past year.

However, short interest surged 18.7% in the most recent reporting period to 35.9 million shares -- the most since mid-February. As such, it's possible some of the recent call buying, particularly at out-of-the-money strikes, is a result of shorts hedging their bearish bets against any upside risk -- especially considering JD.Com Inc's (ADR) (NASDAQ:JD) recent post-earnings price action.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI