By David Russell, reporter at OptionMonster
NEW YORK -- Chinese Internet stocks have been incredibly strong recently, and the lightning struck Youku Todou (YOKU) on Friday.
OptionMonster's tracking systems detected unusual activity in the August 19 calls, with some large blocks snapped up early for $2.35 to $2.50. More than 2,600 contracts changed hands at the strike by the closing bell.
These options lock in the price where stock can be purchased in the Beijing-based company, which provides streaming videos. Given their relative cheapness, they can generate some significant leverage from even a modest move in the share price. That happened on Friday as Youku's stock kept nudging higher, and at one point those calls traded for as much as $3.30 -- a gain of about 40%.Youku closed Friday at $21.27, up 3.76% on the session. It's been lagging its peers and is ranked by our researchLAB service as the worst-performing Chinese Internet stock in the last three months. Others such as Sina and Baidu have been knocking the cover off the ball in recent weeks. Overall option volume in Youku was seven times greater than average in the session. Calls accounted for four-fifths of the total. Russell has no positions in YOKU.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV