Options Traders Eye Bigger Bitcoin Gains for Xunlei Stock – Schaeffers Research

Shares of Xunlei Ltd (NASDAQ:XNET) are soaring today, as Cboe Global Markets’ (CBOE) launch of bitcoin futures lifts stocks with cryptocurrency exposure. At last check, XNET stock was up 23.8% at $14.83, and bullish options trading was picking up the pace.

Heading into the final 30-minute stretch of today’s trading, 8,003 calls and 3,952 puts were on the tape in XNET’s options pits — 1.6 times the expected intraday amount. Most active is the December 15 call, where it seems safe to assume new positions are being purchased. If this is the case, the goal is for the stock to end north of $15 at week’s end, when front-month options expire.

This heavy options trading is hardly new for the China-based tech stock, with call and put open interest both docked at 12-month highs of 39,500 contracts and 24,923 contracts, respectively. And given the equity’s massive bitcoin-related moves recently, volatility expectations are ramped up, too. Specifically, XNET’s 30-day at-the-money implied volatility of 162.8% ranks in the 93rd annual percentile.

Looking closer at the charts, XNET stock spent most of the year churning below $5 until the cloud-communication company in mid-October unveiled its Wanke coin mining project, or OneCoin, a digital currency design similar to bitcoin. From its Oct. 11 close to its Nov. 24 record high, the shares swelled 523%. After hitting this notable milestone, the security pulled back, but has since found a foothold atop its rising 40-day moving average.

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