YOKU and other internet stocks down a bit today ; $16. So did EDU on probe.
UPDATE 1-ADR REPORT-Chinese Internet stocks down on economy
Wall Street suffers worst loss in three weeks
Thu, Jun 21 2012
Tue Jul 17, 2012 2:58pm EDT
By Angela Moon and Doris Frankel
(Reuters) - U.S.-listed shares of Chinese Internet companies fell on Tuesday on concerns about a weak growth outlook in the world's second largest economy.
Hong Kong shares produced their best day in more than two weeks and Chinese insurers and railway sectors jumped in anticipation of more policy support, but the gains were seen as largely technical. Profit warnings that have emerged daily during the past week, and Premier Wen Jiabo's downbeat comments on the Chinese economy pressured Internet stocks, one of the strongest growing sectors.
U.S.-traded shares of Baidu.com Inc fell 2.4 percent to $104.80.
Youku.com Inc shares fell 8.4 percent to $16.50 and Sina Corp shares lost 7.3 percent to $44.33. Sohu.com Inc shares were down 4.3 percent to $35.62 and NetEase Inc shares fell 3.8 percent to $54.62.
"With the recent announcement of a slowdown in the Chinese economy, some investors are concerned that it would even impact Chinese Internet companies," said William Lefkowitz, options strategist at New York-based brokerage firm vFinance Investments.
"As a result, you are seeing these stocks under pressure and some large put buying in some of them."
Traders exchanged 56,000 puts and 43,000 calls thus far on Baidu Inc, 2.9 times the typical levels, according to data from options analytics firm Trade Alert. The most active option in Baidu was the July $100 strike puts, which traded 13,011 times thus far, mostly in small lots.
Overall options volume -- in NetEase, Youku Inc, Sina.com and Baidu -- were all above the average daily levels on Tuesday, Trade Alert data showed. Turnover in their shares has also been active.
"The options market reflects elevated risk in the Chinese digital media stocks as the implied volatility has been rising and the stocks have been dropping over the last week and yet the news flow on them has been sparse," said Ophir Gottlieb, managing director of options analytics firm Livevol.
"The risk appears to be systemic rather than stock specific."
In NetEase, put options were more active than usual, with around 19 contracts changing hands for each single call option in play on the stock late on Tuesday. Overall options volume of 21,000 contracts traded so far compares to a paltry average daily volume of just 824 contracts, according to Interactive Brokers Group data.
But the broader market edged up on gains in Latin American stocks listed in the U.S. The BNY Mellon index of leading Latin American ADRs gained 0.6 percent
The BNY Mellon index of leading American depositary receipts was up 0.3 percent, while the Standard & Poor's 500 index gained 0.6 percent. The BNY Mellon index of leading European ADRs was up 0.3 percent.
The BNY Mellon index of leading Asian ADRs rose 0.1 percent.
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