China Trading Stocks

[realfast95]

$DANG - optionsmonster put this alert out on 5/18

E-Commerce China DangDang releases quarterly results next week, and traders are positioning for a drop by the end of summer.

optionMONSTER's monitoring system detected the purchase of 3,145 September 6 puts for $0.60 and $0.65 today. Volume was more than 11 times the open interest in the strike, showing that this is new positioning.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

DANG is up 3.06 percent to $5.72 in morning trading but is down 26 percent in the last month. The Beijing-based e-commerce company is scheduled to report earnings before the market opens on May 26.

Overall option volume is about average in DANG so far today, but puts outnumber calls by a bearish 4-to-1 ratio.