U.S. shares of JD.com Inc (NASDAQ:JD) are sliding this morning, despite the Chinese e-commerce company's second-quarter earnings and revenue beat. Optimism surrounding the Beijing-based corporation's ongoing acquisition of German electronics retailer Ceconomy were overshadowed by ballooning costs tied to its new, unproven food delivery service.
At last glance, JD was down 3.4% to trade at $31.40. The $31 level has kept losses in check since April, when the stock gapped lower amid U.S.-China trade tensions. Year-to-date, the equity is down 8%
Options traders, however, are betting on a rebound. In the options pits, activity is operating at two times the usual intraday amount, with 71,000 calls exchanged today in comparison to 23,000 puts. The most active contracts are the August 33 and 32.50 calls, with new positions opening at the latter.
Call traders were targeting JD ahead of today, too. The stock's 50-day call/put volume ratio of 8.96 at the International Securities (ISE), Cboe Options (CBOE) and NASDAQ OMX PHLX (PHLX) also sits higher than 99% of readings from the past year.
Analyst sentiment also remains mostly bullish as well. Of the 17 firms in coverage, 13 rate the stock a "buy" or better, while four recommend "hold" or worse.
