China Medical (fka CMEDQ)

[juxtaposezen]

Front-Month Call Players Flock to China Medical Technologies, Inc. (CMED)
9/28/2009 11:36 AM

China Medical Technologies, Inc. (CMED: sentiment, chart, options) was a favorite target among call traders on Friday, with single-session volume nearly six times the norm. More specifically, the China-based medical device maker saw roughly 11,800 calls cross the tape, compared to its average daily volume of fewer than 2,100 contracts.

The in-the-money October 15 and October 12.50 calls were most active, as a plethora of traders initiated ex-dividend plays on CMED. The October 15 call saw 8,400 contracts change hands, while the October 12.50 call saw 2,400 contracts traded.

Checking in on CMED's sentiment backdrop, it appears that near-term option traders are rather wary of the stock. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.89 rests in the 70th annual percentile, suggesting that short-term option speculators have been more bearishly biased only 30% of the time during the past year. On that same note, the stock has garnered the attention of only three analysts, according to Zacks, with all issuing lukewarm "hold" ratings.

Technically speaking, it's not difficult to see why the Street is somewhat skeptical of CMED. The equity has surrendered 13.6% since the start of 2009, and has underperformed the broader S&P 500 Index (SPX) by 24.5% during the past 60 trading sessions. At last check, the security has backpedaled 30 cents, or 1.7%, to hang out in the $17.20 region.