New Oriental Education & Technology Group Inc (EDU) is a private educational services company in China. The company’s stock is currently trading around $26.85 in a 52 week range of $17.46-$34.50. The stock has been underperforming the market this year with shares falling nearly 15% year to date. Despite the stocks relative underperformance options traders are taking a bullish stance on EDU in today’s trading session. Earlier today a trader bought 1,988 May 28 calls for between $1.10 and $1.15. This is the largest block of options to trade on a day when more than 6.8 times the average daily options volume has traded in EDU. Although the stock is trading below the Ichimoku Cloud order flow this strong could be signaling a short term bottom in EDU.
My Trade: Buying the EDU May 28 calls for $1.10
Risk: $110 per 1 lot
Reward: Unlimited
Breakeven: $29.10
Andrew Keene
KeeneOnTheMarket.com
