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September 30, 2013  Mon 11:07 AM CT

KONG: SEE CHART GET CHAIN FIND STRATEGIES
KongZhong is up sharply in spite of today's weak tape, and one trader apparently believes that any downside will be limited in the Chinese digital-entertainment company.

optionMONSTER systems show that 3,300 November 10 puts have been sold for the bid price of $0.30 on a wide bid/ask spread. The volume was twice the previous open interest, so this is clearly a new position.

The put selling is a bet that KONG will hold above $10 through that November expiration. The trader takes on the risk of having to buy shares if they are below that level. (See our Education section)

KONG is up 5.83 percent to $12.86, making up for losses at the end of last week. Shares hit a high of $14.92 at the start of the month but were down at $10 just two days before that peak.

About 3,600 KONG options have changed hands, compared to the daily average of 726 for the last month.
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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