Very Large Call Buyer Hits (JD)

You know how much we love BIG call option buys in little known foreign companies. Well there was just a very large one seen in China based (JD) this morning.

Just a little while ago we saw a trader buy 3,082 August $31 calls.  Most of those were bought at the ask. This opening call buy in this China dot com company had a transaction value of over $150,000. (JD) is currently trading at $30.19 up $1.42, on much higher volume than average.  JD has a 52 week high of $31.22, and a low of $19.94 on the year.  It’s traded 2.46 million shares already this morning by.   It’s average daily volume is just 4 million.  Something big is coming here.

And guess what that could be? (JD)announces quarterly earnings on August 15th, so clearly this is one of th high risk, high reward earnings plays.  Clearly some numbers have leaked from the company, and the friends and family plan is in effect. These calls are now 75 cents to 85 cents, last traded at 80 cents up 52 cents on the day.

jd dot com JD logoWe like this trade given it’s size, the company’s relative obscurity, and the fact it’s China based, which means the insiders are happy to trade on insider news with little chance of any repercussions from the SEC (they’re busy enjoying a latte at Starbucks, and missed this one).

Thirteen analysts currently follow (JD).  The average rating on JD is a “OVERWEIGHT” and the average price target is $32.60. is currently not profitable, with analysts expecting a 13 cent per share loss for the fiscal year, and a quarterly loss of half a cent.

You don’t want to bet the farm on this one as earnings plays can go either way (for example, Kate Spade, yesterday) Either way, we are interested in (JD) and are locked and loaded in the September $32’s which have also seen 1,000 contracts trade so far today