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October 12, 2016  Wed 5:47 AM CT

A large trader apparently believes that upside potential will be limited in through early next year.

optionMONSTER's market scanners show that 5,250 January 28 calls were sold in one print for $1.54 yesterday. This is clearly a new position, as volume surpassed the strike's open interest of 2,179 contracts.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

JD fell 2.01 percent to $26.75 yesterday but is up 23 percent in the last three months. The Chinese e-commerce company is expected to report earnings before the market opens on Nov. 14.

Overall option volume was about average in JD yesterday.

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