The China-based company is on its way to repurchasing billions worth of shares
Options traders are targeting Tencent Music Entertainment Group (NYSE:TME) today, as the stock jumps to its highest level since July 2021. The China-based company yesterday repurchased 3.27 million shares for $1 billion, after last month announcing its intention to buy back a minimum of $12.8 billion this year. The stock also got a boost last week after boosting its advertising business with artificial intelligence (AI).
So far today, 11,000 calls and 3,301 puts have been exchanged, which is 2.6 times the average daily options volume already. The January 2025 15-strike call is the most popular, followed by the July 12 put, with new positions opening at both.
These options traders are in luck, as TME premium is reasonably priced at the moment. This is per its Schaeffer's Volatility Index (SVI) of 40%, which ranks in the low 9th percentile of its annual range.
At last look, TME was up 2% at $11.82. The stock has been carving a path higher since early October, with support from its 60-day moving average catching the steepest pullbacks. Since the start of the year, the equity is up 31.2%.