Upside Purchased on Fuqi International (FUQI)
June 16, 2010 11:38 AM
Shares of Fuqi International Inc, (NASDAQ: FUQI) are higher on the session by 5.71%, currently trading at $9.44. The stock has been drifting lower and lower since a hard sell off in March, but appears to be making a run at the 50-day moving average in recent trading.
Options traders are betting that the run higher may have some legs and are picking up some calls. The July $10 strike was bought, near the offer, 2,008 times today; open interest on the strike is only 1,168 contracts, signaling new, bullish positioning.
It seems likely that these calls were purchased as a hedge to short shares as a huge volume spike in the common stock was seen a few minutes after the options traded. This suggests a bearish tone for Fuqi.
Fuqi International, Inc. is a designer of precious metal jewelry in China, developing, promoting, and selling a range of products in the Chinese luxury goods market. The Company's products consist of a range of styles and designs made from gold and other precious metals, such as platinum and Karat gold.
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