By Mike Yamamoto of OptionMonster
NEW YORK -- Traders are betting that Youku Tudou (YOKU) will rebound from its recent drop.
OptionMonster's tracking systems showed heavy buying in the April 34 calls Wednesday, which went mostly for $1.10 to $1.25. More than 10,500 traded in volume far above the strike's previous open interest of just 348 contracts, a clear indication of new positioning.
These calls lock in the price where the stock can be purchased through mid-April no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $34.Youku shares fell 1.45% to $30.59 on Wednesday. The Chinese video-streaming company ran up to $37.74 last week following strong quarterly results in late February, its highest price since August 2011, but then pulled back sharply. Total option volume in the name topped 30,500 contracts Wednesday, more than triple its daily average for the last month. Overall call outnumbered puts by a bullish 5-to-1 ratio. Yamamoto owns YOKU shares.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV