SINA Options (SINA): Unusual Trading Activity

| August 15, 2012 | 0 Comments

SINAOptions in Chinese internet company SINA (SINA) showed heavy activity yesterday as the S&P started to give back morning gains.

SINA received a huge vote of confidence before it releases earnings after the close today. 

During yesterday’s trading session, our tracking system detected a trader come in and sell 2,550 SINA August $45 strike put options for $0.59 a piece.  This trade was against open interest of 2,237 contracts, indicating that this was a new opening transaction.

The premium collected from the trade totaled $150,450.

Obviously, this put seller is betting SINA will hold that $45 strike price through this week’s expiration.  And if it does, he’ll be laughing all the way to the bank!

I think the chances of this trade working out are good even though SINA was down today at $51.50.  The Shanghai-based online media company has been beaten down along with other Chinese stocks, losing 55 percent of its value since last September.

So, any good news with today’s earnings should keep the stock price above the $45 per share level.

But before we go any further, let’s take a closer look at SINA…

For those of you who don’t know,Sina is a leading internet media company in China.  In fact, the Sina portal is one of the most popular in China, ranking third in terms of user traffic in the country. 

The company generates about 70% of its revenue from online advertising, with the rest coming from wireless value-added services.

As a recognized source of reliable online news and information, Sina has attracted a well-educated and relatively wealthy user group.  This makes them an ideal venue for advertisers.

But that’s not all…  

After building a successful blog business by leveraging strong connections with celebrities, Sina is replicating the model with its new Twitter-like Weibo business.  Sina Weibo reports 300 million registered users and ranks sixth in China in terms of user traffic. 

The company plans to begin monetizing its massive Sina Weibo user base during the second half of this year.

Bottom line…

SINA looks strong right now, and it seems that option traders believe it will remain strong well past earnings. 

For more detailed information on unusual options activity and how you can profit from it, be sure to sign-up for our daily newsletter, Options Trading Research.  It’s always 100% free and packed full of option trading ideas you can use immediately in your own portfolio.  Click here to subscribe for free.

Safe Trading,

Marcus Haber

Tags: , , , , ,

Category: Unusual Options Trading Activity

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.