Calls bet on more gains in Youku
David Russell | [email protected]
optionMONSTER's Heat Seeker system detected steady buying in the December 34 calls, where more than 9,200 contracts traded for $0.85 to $1.40. The volume was well above the strike's previous open interest of 5,465, indicating that new positions were initiated.
These long calls lock in the price where traders can buy the stock for the next five weeks no matter how far it might climb. The contracts can provide significant leverage in a rally but will expire worthless if shares remain below $34. (See our Education section)
YOKU was up 2.56 percent to close at $30.05 yesterday. The streaming-video company, China's version of Netflix, hit a new 52-week high of $31.77 earlier in the session but fell when the rest of the broader market sold off.
Total option volume topped 33,600 contracts yesterday, 6 times its daily average for the last month. Overall calls outnumbered puts by 18 to 1, a reflection of the session's bullish sentiment.
(A version of this post appeared on InsideOptions Pro yesterday.)