(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Chinese Internet stocks have been hot, and now the bulls want to go places with Qunar Cayman Islands.
optionMONSTER's Heat Seeker system detected the purchase of about 6,000 January 55 calls for $1.20 to $1.65 yesterday. Volume was more than 20 times open interest at the strike, an indication that new money was put to work.
Long calls lock in the price where investors can buy a stock, allowing them to profit from a rally with limited capital at risk. Their relatively low cost can also generate significant leverage on a percentage basis. (See our Coaching section)
QUNR rose 4.72 percent to $45.03 yesterday. The provider of travel-agency services to mobile devices almost doubled between March and April, retraced the entire move over the summer, and is now trying to get back in gear.
Other Chinese companies such as Ctrip.com and JD.com, which have been cited frequently on our proprietary Market Action service, have also come to life recently. JD, for instance, saw heavy put selling yesterday as traders bet downside risk will be limited.
Overall option volume in QUNR was 15 times greater than average, with calls accounting for a bullish 76 percent of the total.
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