Trade gives Yandex room to run

David Russell (
June 5, 2014

Yandex has been grinding higher, and one investor apparently thinks that it still has room to run.

optionMONSTER's tracking programs yesterday detected the purchase of 3,225 August 33 calls for $2.53 and the sale of an equal number of November 36 calls for $2.28. Volume was below open interest in the nearer-dated contracts, which suggests that an existing position was rolled from one to the other.

The investor almost certainly owns shares in the Russian Internet stock and had previously sold the August 33s as part of a covered-call trade . Now that YNDX has climbed, he or she is buying back those calls to close that position and is selling the November contracts. Making the adjustment cost $0.25 while raising the exit price on the shares by $3. It also allows the investor to stay in the covered-call trade for an additional three months. (See our Education section)

YNDX rose 1.79 percent to $32.98 yesterday. It lost about half its value between January and late April, partly because of tensions between Moscow and Kiev. It's been rebounding sharply since and is up 24 percent in the last month.

Some 2,000 November 28 puts were sold for $1.70 later in the session, which reflects a belief that any losses will be limited in the name.

Yesterday's total option volume in Yandex was almost triple its daily average for the last month.

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