Youku Tudou Inc.(YOKU) is a Chinese based internet television company that allows users to share video content on a broad range of devices. The company’s stock is currently trading around $22.85 in a 52 week range of $11.85-$24.60. The stock has been massively outperforming the market this year with shares rallying over 28% year to date. Options activity in the name today seems to suggest that traders are expecting this run higher to continue.
Earlier in today’s session several large blocks of calls were bought in YOKU. A trader bought nearly 3,000 YOKU May 22nd Weekly 22 calls for $1.04. Shortly after that order hit the tape another block of 1,000 YOKU May 22 calls were bought for $0.20. By the end of the day over 8.4 times YOKU’s average daily options volume had traded and at the money implied volatility touched new 52 week highs.
YOKU stock ripped higher after these calls were bought and gained over 17% on the trading day. These calls moved higher as well with the May 22nd Weekly 22 calls trading as high as $2.00 on the day and the May 22 calls trading as high as $0.95 making both of these trades absolute blowout winners. These trades are amazing examples of how following unusual options activity in weekly and short expiration options can lead to huge profits.