Bullish option activity began in Yoku Tudou at the start of this week and surged again yesterday.
optionMONSTER's Heat Seeker system shows that some 5,400 August 19 calls traded in a strong buying pattern yesterday as prices rose steadily from $1.74 to $2.40. The volume was more than double the previous open interest in the name, indicating that these are new positions.
Our scanners also detected call buying at the same strike on Monday as the stock broke above its 200-day moving average. Those contracts traded for $1.30 and $1.35 at that time, so they are already worth substantially more.
All of these long calls lock in the price where traders can buy shares and are looking for YOKU to continue rallying through mid-August. The contracts will track the share price closely because they are in the money and will rapidly lose value if the stock doesn't move higher soon. (See our Education section)
YOKU rose 3.86 percent to $20.47 yesterday, closing above its 50-day moving average for the first time since June 19. The Beijing-based video-streaming company has been coming to life recently as Chinese Internet stocks increasingly come back into favor.
Youku has not announced the date of its next quarterly report, but last year's calendar suggests that results will be released in early August, before that month's options expire.
Total option volume in the name topped 11,300 contracts yesterday, more than 7 times its daily average for the last month. Overall calls outnumbered puts by a bullish 6-to-1 ratio.
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