Bullish Strategist Targets China Mobile

CHL – China Mobile, Ltd. – Shares of the mobile telecommunications company that offers services in Mainland China and Hong Kong are up 1.90% at $52.74 as of 11:40 am ET. An investor expecting the price of the underlying stock to reach a new 52-week high by January expiration appears to have established a bullish risk reversal. A number of recent positive signals indicating stable momentum in the rapidly-growing Chinese economy have helped China Mobile’s shares climb higher. Premier Wen Jiabao said China will boost domestic demand, reports revealed that China’s service industries expanded, and the manufacturing PMI released on October 1 jumped to a four-month high. A bullish options strategist hoping to see more good news going forward positioned for shares in China Mobile to surge over the next four months. It looks like the trader sold 4,686 puts at the January 2011 $47.5 strike for a premium of $0.90 each in order to buy the same number of calls at the January 2011 $57.5 strike at a premium of $0.90 apiece. The trade positions the bullish player to make money if CHL’s shares jump 9.025% over the current price of $52.74 to trade above the effective breakeven price of $57.50 by expiration day in January. China Mobile’s shares last traded up at their current 52-week high of $54.70 back on August 17, 2010.

About Andrew Wilkinson 1023 Articles

Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.