Wednesday, December 30, 2009

Kongzhong (KONG) - Opening Size Call Buyer

KONG is a $400 million Chinese 2.5 G mobile interactive entertainment provider in China. The stock is up ~13% and IV30™ is up 23% as well. The LIVEVOL™ Pro Summary is included below.



The company averages 437 option contracts a day - already nearly 7,000 have traded just an hour into the day. 6,800+ have been calls - a 253:1 call to put ratio. The Company Tab snapshot is included below (click the image to enlarge it).



The Feb 12.5 calls are the action. Over 6,700 have been purchased on essentially no open interest (OI) - these are opening order purchases. The day's biggest trades snapshot and the Options Tab snapshot are included below (click either image to enlarge them).





The Charts Tab snapshot below (click the image to enlarge it) illustrates the stock move today, the vol increase and the unusually high level of option volume.



Vol is up on call purchases - the skew is changing shape from the classic volatility smile (smirk) to an upward curving smile. The demand for the calls is going up --> that means vol is going up. This is "irregular" but not "uncommon" when one line continues to trade on the offer.

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