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Call sale sees top in ChinaCache

Chris McKhann (chris.mckhann@optionmonster.com)

Call selling sees a ceiling in shares of online services company ChinaCache.

A trader sold 4,001 November 22.50 calls for $0.75, according to optionMONSTER systems. This is clearly a new position, as open interest in the strike was a mere 12 contracts before the trade appeared. That volume also far above the name's total daily option average of just 256.

The calls were not traded against any underlying shares identified by our systems today and, given how far out of the money these contracts are, they could have been sold naked with an initial bearish bias. The calls could also have been traded against an existing long-stock position in a covered-call strategy , which would be bullish up to the $22.50 strike price but not beyond. (See our Education section)

CCIH is a high-volatility stock. The Beijing-based cloud-computing company is up 2.24 percent to $13.68 this morning, in the middle of its recent range. But shares were above $29 at their mid-March high and below $4 a year ago. 

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