Bulls come back to Sina

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Chinese Internet stocks have been incredibly strong recently, and the bulls came back to Sina yesterday.

OptionMonster's tracking systems detected the purchase of about 3,000 August 70 calls for $1.18 and the sale of a similar number of August 80 calls for $0.18. Volume was more than triple the previous open interest at each strike, showing that these are new positions.

Owning calls locks in the price where shares can be bought, while selling them creates the obligation to unload the stock if it rises above a certain level. Combining both creates a trade known as a call spread that lets investors control a move between two prices.

In this case, the trader will receive $10 if Sina closes above $80 at the August expiration three weeks from now. The investor paid $1 for the spread, which means that the profit would be 900 percent if the the Shanghai-based online media company reaches that $80 level.

Sina rose 1.04 percent to $64.29 yesterday and is up 22 percent in the last month. The call spread was initiated before Chinese Internet giant Baidu issued quarterly results after yesterday's close. That report was strong and sent Sina higher by another 3 percent in extended trading.

The company hasn't yet announced the timing of its own earnings release, but last year's calendar suggests that it will occur around Aug. 15. That would be before yesterday's spread expires, so there is at least one more potential catalyst coming.

Total option volume in the name was twice its daily average, with calls outnumbering puts by a bullish 3-to-1 ratio.

—By CNBC Contributor David Russell.

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David Russell is a reporter and writer for OptionMonster. Russell has no positions in SINA.